China GDP growth target lowered to between 6% to 6.5% for 2019
Mar 05, 2019 (China Knowledge) - Beijing has once again set a lower economic growth target for this year and will step up fiscal measures to stabilize growth.
The government has now set a growth target of between 6% to 6.5% for this year down from a target of “around 6.5%” last year due to headwinds such as the trade war with the United States, already high debt levels and financing bottlenecks for private firms.
According to economists at Morgan Stanley, in order for China to achieve its previously set target of doubling the size of its economy from 2010 to 2020, China needs a growth of 6.2% for this year. To achieve this, the Chinese government will pursue a proactive fiscal policy with greater intensity and overall government expenditure is expected to increase to over RMB 23 trillion, up 6.5% from last year.
At the same time, the Chinese government will continue to employ “prudent” monetary policies and increases in M2 money supply will come in line with nominal GDP growth. Once again, Premier Li Keqiang denied rumors of the central bank potentially engaging in massive stimulus campaigns to boost growth.
This year, the government’s “employment-first” jobs policy will also be elevated to become a macro policy for the first time, highlighting the emphasis placed on maintaining employment growth and employment rates.
Employment is an important cornerstone in maintaining stable and healthy growth for the country and the government aims to create 11 million new urban jobs this year, compared to the actual 13.6 million jobs created last year. Target for urban unemployment rate was set at about 5.5%, compared to last year’s actual 5.1%.
Inflation is aimed to be kept at under 3% this year, the same cap set by the government last year.
This year, challenges and economic headwinds faced by China are significantly more complicated than before and downward pressure on the Chinese economy during the first half of this year will likely be high as the impact of US tariffs will have their effects fully felt on the national economy.
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