Daily Outlook

China sets 2021 GDP growth target of more than 6% as premier warns of ‘formidable tasks’ in finance

China has set growth target of over 6% for 2021, Chinese Premier Li Keqiang announced Friday at an annual parliamentary meeting — the country’s most important political event of the year. Such growth would come off a low base. China reported GDP growth of 2.3% last year — the only major economy to expand amid the coronavirus pandemic. The country’s official economic figures are often doubted for their accuracy. Li announced the growth target in a government work report delivered at the opening ceremony of the National People’s Congress. The meeting is part of Beijing’s “Two Sessions” annual parliamentary gathering which sets economic and political national priorities for 2021.

The premier struck an overall positive tone on China’s economic recovery from the pandemic, while noting areas of weakness such as “impediments” to consumer spending, tough conditions for small businesses and mounting pressure in maintaining stable employment. For 2021, Li said China aimed for an urban unemployment rate of around 5.5% and targeted the creation of more than 11 million new urban jobs, the same as in 2019 and up from 9 million last year.

China will also aim for an increase of around 3% in the consumer price index, a measure of inflation, Li said. Strengthening science and technology development was among major tasks for the year, Li said. He noted that “in forestalling and defusing risks in the financial sector and other areas, we face formidable tasks.”

On international trade, Li said the country would “promote the growth of mutually beneficial China-US business relations on the basis of equality and mutual respect.” He did not elaborate further, but said China will work to accelerate free trade negotiations with Japan and South Korea, and actively consider joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

Tensions that escalated between China and the U.S. in the last few years have shifted from just trade into areas such as technology and controversy over the origins of Covid-19. In prepared remarks, Li said Friday there were still “weak links” in China’s control of Covid-19, but that the economy had sufficiently recovered. Li said there are no plans for new bond issuance for combating the effects of the pandemic and that the deficit-to-GDP ratio would be around 3.2%, lower than last year’s target of over 3.6%.

China sets 2021 GDP growth target of more than 6% as premier warns of ‘formidable tasks’ in finance, CNBC, Mar 5

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