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China sets modest GDP growth target as economy improves
"As a general target, China's growth rate has been set at over 6 percent for this year," Premier Li Keqiang said in his 2021 work report. "In setting this target, we have taken into account the recovery of economic activity."
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China's President Xi Jinping gives a speech at the opening session of the Chinese Communist Party's five-yearly Congress at the Great Hall of the People in Beijing on Oct. 18, 2017. President Xi Jinping declared China is entering a (Agence France-Presse/Nicolas Asfuri)
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hina on Friday set a modest annual economic growth target, at above 6 percent, and pledged to create more jobs in cities than last year, as the world's second-biggest economy emerged from a year disrupted by the effects of COVID-19.
"As a general target, China's growth rate has been set at over 6 percent for this year," Premier Li Keqiang said in his 2021 work report. "In setting this target, we have taken into account the recovery of economic activity."
China's GDP expanded 2.3 percent last year, the only major economy to see growth.
But the 2021 target was significantly below the consensus of analysts, who expect growth could beat 8 percent this year. Chinese shares fell.
"If sequential growth averages zero from Q1 to Q4 this year, we will get around 6.1 percent annual growth this year," Nomura said in a note.
"Beijing does not want to set a growth target too close to 8.0 percent as it does not want to slash the growth target next year."
Aninda Mitra, senior sovereign analyst at BNY Mellon Investment Management, said the modest growth target will allow the authorities to emphasise the quality of growth rather than its quantity.
"In the aftermath of the pandemic, a low bar should allow most provinces to cross the hurdle without over-stretching themselves financially," Mitra said.
In 2020, China will target the creation of more than 11 million new urban jobs, Li said in his report delivered at the opening of this year's meeting of parliament.
That's up from a goal of over 9 million new urban jobs last year, and in line with recent years.
In line with an improving economy, the government is targeting a 2021 budget deficit of around 3.2 percent of GDP, less than a goal of above 3.6 last year.
The quota on local government special bond issuance was set at 3.65 trillion yuan ($563.65 billion), also down from 3.75 trillion yuan last year.
China also has no plan to issue special treasury bonds this years, after issuing such bonds for the first time last year to support the virus-hit economy.
The government has set its 2021 target for consumer price inflation at around 3 percent, compared with a target of around 3.5 percent last year. ($1 = 6.4756 Chinese yuan).
