China is planning a careful course out of a COVID-disrupted year. Its government on Friday set a modest annual economic growth target, at above 6%. It is pledging to create more jobs in cities for this year.
Last year, the country dropped a gross domestic product (GDP) growth target from the premier’s work report for the first time since 2002. This was after the pandemic devastated its economy last year, and China’s GDP expanded 2.3%. That was the weakest in 44 years, but it made it the only major economy to report growth.
As a general target, China’s growth rate has been set at over 6% for this year, according to Premier Li Keqiang’s 2021 work report. In setting this target, they’ve taken into account the recovery of economic activity, the work report said.
The 2021 target, however, was significantly below the consensus of analysts. They expected growth could beat 8% this year, and Chinese shares fell.
The world’s second-biggest economy’s conservative growth target reflects a public effort. That is an effort to demonstrate a return to economic stability while also keeping control of appetite for debt and risk. This is in the aftermath of the coronavirus last year.
Notably, the low GDP target does not mean the government will rush to tighten policy. Many aspects of the economy are still struggling. Thus, it will give planners more room to push reforms.
The Premier pledged to spur domestic consumption and innovation. This is part of a plan to lessen its dependence on overseas markets and technology for long-term development.
With that, China plans to foster annual research and development spending by more than 7% each year until 2025.
In 2021, China aims to create more than 11 million new urban jobs. This was stated in Li’s report delivered at the opening of this year’s meeting of parliament. The is up from 2020’s goal of over 9 million and in line with recent years.
Tightening HK Grip, Set GDP, Citing Last Year’s Achievements
Meanwhile, China on Friday moved to overhaul Hong Kong’s electoral system. Premier Li Keqiang touted China’s achievements last year in overcoming the coronavirus pandemic.
He laid out ambitions to solidify the economic recovery. His goals included cutting emissions, investing in innovation and improving a worsening demographic outlook.
After unveiling China’s next five-year plan, he highlighted the country’s commitment to become self-sufficient. This is because China clashes with the United States and other countries over technology policy.
Li said they owe their achievements last year to the strong leadership of the Party Central Committee. That was with Comrade Xi Jinping at its core.
This was Li’s statement during an hour-long speech to over 5,000 delegates gathered in the Great Hall of the People. All of them were inoculated against COVID-19 with a vaccine made by China’s Sinopharm.