By Kevin Yao
BEIJING (Reuters) – China’s 2023 growth target increasingly ambitious, could target as high as 6% in hopes of achieving participation Sources in the policy discussions said to boost investor and consumer confidence and build on a hopeful post-pandemic recovery.
Four sources said China’s economic growth target could be as high as 6%, while three others said China’s target was 5%-5.5%. They all spoke on condition of anonymity because the discussions were held behind closed doors.
Overall, the figures point to a rise in optimism in Chinese policy circles from 4.5% to 5.5% compared with the modest target recommended by government advisers in November.
The previous advice came weeks before China lifted some of the world’s toughest COVID- restrictions. Recent data have shown that the economy is recovering from the impact of the epidemic at a faster rate than expected.
Final growth target likely to be a range, to be announced early March 5th at China’s annual legislative session.
“The growth target for this year is probably 5-6 percent,” said a person involved in the discussions. “We need economic recovery, employment and confidence, and those are the key factors we need to consider.”
One of three sources advocating a more moderate target warned, “Real estate The industry is still in decline, the gap is difficult to fill, and foreign trade may drag down economic growth this year.”
None of the seven sources participated in the final decision-making process.
The government will also unveil more stimulus measures at this month’s National People’s Congress to cushion the impact of a weakening property market and weaker global export demand, four people familiar with the matter said.
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To stimulate economic growth, the government is expected to widen its annual budget deficit to around 3 percent of GDP this year and issue about 4 trillion yuan in special bonds to support growth, they said. investment spending.
The new economy leadership team, expected to be led by former Shanghai party secretary Li Qiang, Chi four said na’s new prime minister is eager to show they achieve better economic growth to create more jobs and ease local governments Financial pressure capacity.
BIG MISS
China’s economy at growing 3% from a year ago, seriously below official target of around 5.5% due to COVID -19 ) The pandemic, housing market stress and slowing global demand have hit hard. Excluding 2020, when the pandemic started, it was the worst performance since 1976 – Mao Zedong’s decade-long Cultural Revolution The last year has devastated the economy.
It’s also the biggest growth target miss ever. China’s previous only slight missteps during the Asian financial crisis in the late 2014’s and the currency crisis in the 2014-
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The target range set by China last time was 2014 6-6.5%.
Some economists argue that China’s ambitious annual growth targets are counterproductive and that policymakers should focus on structural reforms to make any economic expansion more sustainable.
Sublime in the past, these goals have forced local governments to launch expensive infrastructure projects that have an overall debt to China of almost 15% made significant contributions.
The three sources also said China would stick to its long-term inflation target of around 3%.
Strong start
Consumption and services lead China’s economic recovery so far this year. Manufacturing activity also expanded at the fastest pace in more than a decade in February, beating expectations, an official survey showed on Wednesday.
Iris Pang, chief economist for Greater China at ING, said in a note that this week’s upbeat data gave the government good reason to set a high growth target of 5.5% to 6%.
On March 5, outgoing Premier Li Keqiang will deliver a 2023 government work report that includes key economic goals and policy priorities.
State media quoted Li as saying on Wednesday that the government was still revising the work report.
“Growth will be higher than 6 percent this year, which is not high considering last year’s low base,” said the PBOC’s Yu Yongding, an influential government economist, told Reuters.
Yu said a growth target of more than 6 percent would help “boost morale and unleash China’s economic growth potential.”
