China sets GDP target of more than 6% in 2021

China sets GDP target of more than 6% in 2021

access_time2021-03-05 10:00:41


China bucked the global recession in 2020, and in doing so narrowed the economic gap with the United States. Now it says it needs to pick up the pace this year.

Premier Li Keqiang on Friday announced that China would target growth of more than 6% in 2021.

While China emerged from the global downturn caused by the coronavirus pandemic on surer footing than any other major economy, it still only grew 2.3% in 2020.

The new target is more than what China needs to accomplish to get back on track with President Xi Jinping's long-term goal for the economy. To reach Xi's plans to double GDP by 2035, China would need to grow a bit less than 5% this year, with similar growth through the next decade or so.

But it's also still lower than what some observers would have liked to have seen for the world's second largest economy.


 

Li's remarks came during China's "Two Sessions" meeting, the country's biggest political gathering of the year. Beforehand, there had been an intense debate in the country about whether to bring back a GDP target, which it abandoned last year for the first time in decades as the coronavirus took hold.

Some experts — including Yang Weimin, the former secretary-general of the National Development and Reform Commission — have encouraged such guidance, saying that China needs to set benchmarks to keep its growth on pace.

But others have been wary about bringing back GDP targets just yet. Ma Jun, a policymaker at the People's Bank of China, said earlier this year that goals that are too ambitious could encourage local governments to borrow too much, heightening the risk of accumulating "hidden" debt.

China spent hundreds of billions of dollars last year on programs to stimulate economic activity, including major infrastructure projects and cash handouts for its citizens.

That amount of spending isn't carrying over to 2021.

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