China set to lower GDP growth target

By Hu Weijia Source:Global Times Published: 2014-12-21 23:13:01

Pro-growth measures also likely: experts

A worker processes steel products at a factory in Rizhao, East China's Shandong Province. Photo: IC

China is expected to lower its economic growth target in the country's next ­five-year plan period, analysts said Sunday, but pro-growth measures will probably be rolled out during the period as well.

China is likely to see its economic growth ease to an annual rate of 6.5-7.0 percent year-on-year during the 13th Five-Year Plan period (2016-20), down from the 7.0 percent growth target in the current 12th Five-Year Plan (2010-15), Li Yang, deputy head of the Chinese Academy of Social Sciences (CASS), the country's leading State-run think tank, said at a forum held in Beijing Sunday.

Liu Shijin, deputy head of the Development Research Center of the State Council, agreed with Li and told the forum that China's economy will shift gear toward medium-to-high speed growth between 2016 and 2020.

China's GDP increased at an average annual rate of 11.2 percent during the 11th Five-Year Plan period (2006-10), and if the economy expands by 7.4 percent in 2014 and by 7.0 percent in 2015, as has been widely estimated, the average annual GDP growth will reach 7.8 percent during the 12th Five-Year Plan period, according to data from China Development Bank revealed at the forum.

At the Central Economic Work Conference, a key annual economic meeting that ended on December 11, China's leadership called on the country to adapt to a "new normal," wherein the economy would grow at a slower pace.

Even a slower economic growth rate of 6.5-6.8 percent from 2016 to 2020 would allow the country to meet the target of doubling its 2010 GDP and per capita income for both urban and rural residents by 2020 - a goal announced by former top leader Hu Jintao at the opening of the 18th National Congress of the Communist Party of China in November 2012 - the China Development Bank data showed.

Li Yining, a political advisor and renowned Chinese economist, said at a forum on December 10 that ­participants at a previous conference focused on the 13th Five-Year Plan believed that China would lower its growth target to 6.0-7.0 percent between 2016 and 2020.

China's five-year plans, first initiated in 1953, aim to map out the country's economic and social development for the coming five years.

The research normally starts one year before the launch of each five-year plan, but the research for the 13th Five-Year Plan started earlier than usual.

Xu Xianping, vice minister of the National Development and Reform Commission (NDRC), China's top economic planner, chaired a meeting from September 18 to 20 attended by delegates from nine provincial-level regions including Shanghai and East China's Zhejiang Province, at which they reported their preliminary research for the 13th Five-Year Plan.

Zheng Xinli, deputy director of the China Center for International Economic Exchanges, a Beijing-based think tank, told the Global Times on Sunday that China should aim for annual economic growth of 7.0 percent from 2016 to 2020 in order to maintain social stability.

The primary task for 2016-20 should be issuing measures to boost domestic consumption and steer China's economy away from export and investment-led growth, Zheng noted.

According to data from the General Administration of Customs, China's foreign trade growth in the January-November period fell to 3.4 percent year-on-year, down from 7.7 percent in the same period last year and well below the country's target of 7.5 percent for 2014.

Exports have long been a key driving force for China's economic growth, but for the next Five-Year Plan period, foreign trade growth may contribute nothing to GDP growth, said Li Yang from the CASS.

Investment and domestic consumption are expected to contribute an equal share to GDP growth from 2016-20, he noted.

The government should implement a proactive fiscal policy to boost investment growth in the coming years, which could also increase domestic demand, Zhang Guobao, former head of the National Energy Administration, said at the forum.

However, the investment should be focused on key areas, such as healthcare, Zhang told the Global Times on Sunday.

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