Chinese economic recovery gives support for this year’s GDP target of above 6%
Published: Mar 05, 2021 03:31 PM
The picture shows aircraft carrier Shandong berths at a naval port in Sanya. China's first domestically-made aircraft carrier Shandong (Hull 17) was officially commissioned to the PLA Navy at a military port in Sanya, South China's Hainan Province, on the afternoon of December 17, 2019, making China one of the few countries in the world that have multiple carriers. Photo:China Military

Photo: VCG

China's economic recovery has given support to this year's GDP target, Sun Guojun, a member of China's Government Work Report drafting group, said on Friday, after China announced a general target of over 6 percent for its economy for 2021.

"In setting this target, we have taken into account the recovery in economic activity. A target of above 6 percent will enable us to promote reform, innovation, and high-quality development," Premier Li Keqiang said in the Government Work Report delivered at annual session opening of the National People's Congress, the country's top legislature, on Friday.

The report said the projected targets for growth, employment, and CPI should keep the economy performing within the appropriate range. These targets will help sustain a healthy economic growth.

The GDP target followed a rare decision not to set a target for economic growth in 2020 due to uncertainties from the impact of the coronavirus.

One of the biggest reasons why the government did not set a growth target last year is that there were many uncertainties, and it would not have been easy to achieve positive economic growth given such a situation at the time, Sun said. 

As of this year's target, Sun said that it has taken into account many factors, and one is the current economic recovery.

He explained that starting from the second quarter last year, China's economy is gradually recovering, and it has continued to improve from the third and fourth quarters. 

China witnessed a V-shape GDP growth last year, as GDP in the first quarter saw negative growth of 6.8 percent, before climbing to 3.2 percent, 4.9 percent and 6.9 in the succeeding three quarters, with China realizing a 2.3 percent GDP growth last year.

"It is expected that this year's economy will maintain stable operation," Sun predicted.

Several data in the first two months show that Chinese companies have a strong ability to adapt to changes in the situation and that China's economic development has a strong stamina. 

In the first two months, the manufacturing PMI remained above 50 percent, power generation and electrical consumption maintained an increase of more than 20 percent, and the freight index such as the daily railway loading volume maintained an increase of more than 10 percent, He Lifeng, head of the National Development and Reform Commission said on Friday.

"We have reasons to believe that we can achieve this year's GDP growth with confidence, determination, and strength," He said.  

The country's GDP in 2021 also takes into consideration the development base, as the year's economic performance will show a low trend at the start before rising, Sun noted, adding that the GDP target this year also needs to be sustainable and lead to a healthy development in the succeeding years.

Market watchers also said the target shows China holds a "bottom line" for the Chinese economy, and that China will focus more on a quality development. 

A "bottom-line target" of above 6 percent emphasized the importance of quality growth behind the growth rate, Cheng Shi, chief economist at ICBC International Holdings, said in a note sent to the Global Times on Friday. 

From a data perspective, relative to the "easy to complete" growth target, China has given more stringent and high-standard employment goals, people's livelihood goals, and inclusive finance goals, showing China's determination to make its economic development with higher qualities, Cheng said. 

The fact that China set a growth target illustrates the continuing importance of a specific target in shaping Chinese economic policy, notwithstanding the increased focus on other policy objectives, including the environment, poverty reduction and the promotion of key strategic industries in line with its "dual circulation" strategy, Martin Petch, Vice President and Senior Credit Officer at Moody's Investors Service, said on Friday.