GDP Growth, Chinese Economy

As China’s annual “two sessions” will kick off on Thursday, the State Council, the country’s cabinet, revealed on Tuesday that all the 38 quantitative targets listed in the 2019 government work report have been achieved.

For major economic goals, last year’s government work report set a GDP growth rate range of 6 percent to 6.5 percent for 2019 and newly added urban jobs of over 11 million, with an urban unemployment rate of below 4.5 percent.

Eventually, the country’s GDP growth rate reached 6.1 percent, with 13.52 million jobs created and an unemployment rate of 3.62 percent.

Last year, China’s tax and fee cuts totaled over 2.3 trillion yuan ($281.43 billion), slightly higher than the initial goal of 2 trillion yuan.

In terms of improvement of people’s lives, a total of 11.09 million Chinese people were lifted out of poverty in 2019, 290,000 kilometers of roads were built or restored in rural areas and mobile network service fees were lowered by 41 percent year-on-year – all of which outperformed the goals.

China also achieved quantitative targets in other areas including ecological protection.

Despite better-than-expected performance amid downward economic pressure in 2019, the abrupt outbreak of COVID-19 poses huge challenges for China this year, especially as 2020 marks the end of China’s 13th Five-Year Plan (2016-20).

A meeting of the Political Bureau of the Communist Party of China‘s Central Committee held in March urged efforts to achieve this year’s economic and social development goals and tasks including building a moderately prosperous society in all aspects and eradicating poverty.

Li Daokui, a professor with Tsinghua University, told the Global Times in a recent interview that the country’s GDP growth has to reach 5.5 or 5.6 percent this year in order to double per capita income in 2020 from what it was in 2010.

The Chinese People’s Political Consultative Conference National Committee will start on Thursday, followed by the National People’s Congress session on Friday, during which the 2020 government work report will be delivered.

Wan Zhe, chief economist at China National Gold Group Corp, told the Global Times that a comprehensive economic target involving GDP, unemployment and CPI may be set this year to guide economic activities, and a GDP range of 2-3 percent would be appropriate.

“There is uncertainty about whether the Chinese economy can achieve growth of 3 percent this year if the global pandemic situation continues to deteriorate,” she said.

Wan said the country’s fiscal deficit may be raised to 5 percent to minimize the impact of COVID-19 on the economy.

(In association with Global Times)