[People’s Daily] Liu Wei: Why China Set its GDP Growth Target at 6.0%-6.5%?

On March 5, 2019, the second session of the 13th National People’s Congress opened at the Great Hall of the People in Beijing, where Premier Li Keqiang delivered the Government Work Report about targets for 2019. Liu Wei, Dean of National Academy of Development and Strategy, RUC was interviewed to interpret the implications of the GDP growth in the report.

Liu indicated that first, the downturn in investment growth and the rapid decline in consumption growth are primarily responsible for the slowdown of GDP growth last year.

Second, the considerations for this year’s economic growth should include domestic trends with development pressure from stable employment, prevention of major economic risks and building of moderately well-off society, as well as external environment such as the downturn of global economic cycle, constant dislocation of financial cycle, and uncertainty of the trade frictions. Thus, the GDP growth rate set between 6.0% and 6.5% is feasible and compatible with high-quality economic development, supply side structural reform, and the “stabilizing growth, preventing risks” policy.

To ensure the economy operates within a rational range, Liu suggested that we have to pinpoint where the pressures come from. Judging from current economic situations, there are four problems need to be solved: first, if the downturn in Chinese private sector persists, all the KPIs of Chinese economy will be difficult to meet.

Second, the reverse of world economy might be time-consuming, and all kinds of trade tensions could escalated in sluggish economy, especially between the US and China. Whether an agreement deal can be achieved in the next few months between the two sides is crucial.

Third, under the influential factors such as adjustment of real estate, fluctuations in currency market, and explicitation of partly risk points, the financial risk could rapidly increase.

Finally, some local officials and entrepreneurs’ failure to conduct consistent, proactive, and powerful actions can also contribute to the source of pressure. However, even under tremendous pressure, China shall seek for each and every chance to drive forward the economic development.

Liu Wei, President of Renmin University of China, Dean of National Academy of Development and Strategy, RUC.

The original article first published at:

https://www.hubpd.com/c/2019-03-05/795147.shtml