China’s shift away from 5-year targets increases policy flexibility
BEIJING: China’s decision not to set an economic growth target for its new five-year plan will give policymakers more room to account for uncertainties and respond to changes, a senior state planner official said on Monday.
In its 2021-2025 economic plan delivered to the nation’s legislature on Friday, China did not include any average annual growth targets, unlike the previous fiveyear plan issued in 2016.
It did, however, pledge to keep growth in a “reasonable” range over the five-year period and set an annual gross domestic product target of above 6 per cent for the current year, having dropped the 2020 target last year amid global uncertainties caused by the pandemic.
Hu Zucai, Vice-director of the National Development and Reform Commission, said on Monday predicting growth for an annual period contingent on the circumstances would be easier than setting targets over a fiveyear period.
“By not setting a specific and quantitative (five-year) growth target, we will be more proactive, active and at ease in coping with all sorts of risks, which is conducive to boost the flexibility of our development’’, Hu told a press conference on the sidelines of the annual parliament meeting.
He added that it also helps to guide agencies to focus on improving the quality of efficiency of growth, instead of just numerical growth.
“We are confident that GDP will maintain a certain level (over the next five years)’’, he said. Beijing’s targets for unemployment and energy and carbon intensity in 2021-2025 are linked to GDP, suggesting growth was targeted to stay in line with its potential rate.
He did not specify the potential rate, a gauge of the economy’s growth when inflation and unemployment conditions are stable, although analysts estimate it to be around 5 per cent.
China aims to keep its jobless rate within 5.5 per cent and cut energy intensity by 13.5 per cent over the period.