Chinese government may cut its GDP target for 2022 to 5% from 6%

Advisers to China's government will recommend authorities set a 2022 economic growth target below the one set for 2021, giving policymakers more room to push structural reforms amid growing challenges to the outlook.

Investors are closely watching for clues on next year's policy and reform agenda as President Xi Jinping and other top leaders hold the annual Central Economic Work Conference due this month.

Three advisers told Reuters they have drafted recommendations for annual economic growth targets ranging from as low as 5 per cent to 5.5 per cent, ahead of the closed-door conclave, down from the “above 6 per cent” target set for 2021. “Ideally, we should have growth of 5-5.5 per cent or around 5.5 per cent next year,” one of the advisers said.

“It’s necessary to maintain economic stability next year as we unveil a new leadership, and we need some counter-cyclical policies to cope with economic pressures.” Another of the advisers, from a top government think tank, recommended a target of above 5 per cent for next year.

The advisers make policy proposals to the government but are not part of the final decision-making process. It was not known when the recommendations would formally be made. 

A Reuters poll in October showed economists expect China’s growth to slow to 5.5 per cent in 2022, but some analysts have since trimmed forecasts on fresh risks such as a deteriorating real estate sector.

‘EU’s Global Gateway can complement BRI’

Playing down the likely challenge from the EU's ambitious $340 billion Global Gateway infrastructure programme to its BRI, China on Thursday extended a guarded response, saying the two initiatives can complement each other. On Wednesday, the European Commi-ssion President Ursula von der Leyen unveiled the EU's infrastructure drive, which officials said will offer a “true alternative” to Belt and Road Initiative. “China welcomes all initiatives that help developing countries improve infrastructure,” said Chinese Foreign Ministry’s Wang Wenbin. (PTI)