Bye-bye, GDP targets?
When China gave its bleakest-ever data release on quarterly GDP numbers last month, we noted that some commentators called it “refreshingly honest.”
There is a possibility that we will see a similar candidness from the upcoming National People’s Congress work report, the annual readout of government slogans and goals, which typically leads with an ambitious annual GDP target.
Because of “uncertainty caused by the global coronavirus pandemic,” China is considering not setting a numerical target this year, Bloomberg reports (porous paywall). Rather than a number, Beijing may simply write “a description of the goal for gross domestic product growth.”
- The uncertainty is partially about a “slump in global demand as the pandemic spreads,” Bloomberg says.
- But even within China, there remains “considerable uncertainty to the epidemic control,” Xí Jìnpíng 习近平 said at a Politburo Standing Committee meeting today, according to a Xinhua readout (English, Chinese). “The epidemic prevention and control measures in Hubei should not be relaxed,” Xi added.
Bloomberg points out a subtle signal that a more flexible growth target may be in the works: A Politburo meeting readout (in Chinese) on April 17 said that China should “stick closely” to its goal of achieving a “moderately prosperous society” this year. This was weaker language than a readout (in Chinese) from March 27 that said the government should “ensure the achievement.”
Also, Mǎ Jùn 马骏, an important adviser to the People’s Bank of China, has for years called on Beijing to drop growth targets, this year elaborating (in Chinese) that an ambitious growth target could “kidnap macroeconomic policies and eventually force the use of an all-out stimulus,” which Beijing may not want to do because of debt concerns.
Economists surveyed by Bloomberg estimate 1.8% growth for China’s economy this year, compared with an official growth rate of 6.1% last year.