The Chinese government on Friday announced that it intends to achieve a GDP growth rate above six percent in 2021, as the annual plenary meetings known as the ‘Two Sessions’ commence in Beijing.
During the anticipated presentation of a government work report, China’s premier Li Keqiang also outlined plans to add up to 11 million urban jobs to the workforce and emphasized the need to kickstart domestic consumption and innovation. Framed as a blueprint for returning to economic stability, the goals indicate a circumspect yet confident approach by authorities on the heels of the Spring Festival national holiday.
The yearly meeting between the National People’s Congress and the National Committee of the Chinese People’s Political Consultative Conference has historically provided an opportunity for top decision-makers to reveal sweeping new policies and economic objectives for the upcoming year.
In 2020, the unprecedented disruption caused by the outbreak of COVID-19 spurred officials to refrain from setting a GDP growth target while emergency fiscal measures were implemented to rescue a struggling market. Although later reports divulged that the Chinese economy expanded by just 2.3% by the end of the year, the country was also the only major global economy to record growth during the period.
That authorities in Beijing have now confirmed their intention to return the annual growth rate to above six percent will likely come as a relief to investors, as attempts to kickstart local economies around the world continue to be impaired by the ravaging pandemic.
Top economists have forecast that China’s economy will easily surpass this intended rate of growth in the coming year. ING analyst Iris Pang, regarding the six percent figure announced Friday morning, commented that it “seems like there is no target at all because the consensus is 8% and [ING’s] forecast is 7%.”
The lower target is likely the product of enduring caution as global vaccination campaigns have only recently begun widespread implementation and other large countries are still coping with domestic outbreaks.
The figure could also serve to hedge expectations: as Western economies, including China’s chief economic and geopolitical rival in the United States, continue to flounder, officials in Beijing have likely determined it is not necessary to set high benchmarks in order to emerge from the COVID-19 era with the reputation of a leading economic powerhouse.
In the Friday morning session, Premier Li also offered insight into the government’s current strategy regarding a range of other issues, including military and defense spending, environmental policy, amendments to Hong Kong’s governance, Taiwan, and the upcoming Beijing Olympics.