China ‘Must’ Set GDP Growth Target This Year: State Researcher

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China should go against market expectations and set a target for economic expansion in 2021 to ensure quality growth, a researcher at an influential government think-tank told state media.

“Without a certain pace of expansion, the quality of the economy doesn’t have support,” Zhang Liqun, a researcher at the Development Research Center of China’s State Council, said in an interview with the state-run China Internet Information Center. “I think it is necessary to set a goal for economic growth this year, and the conditions are in place for it,” he said, referring to the nation’s strong recovery from the Covid-19 outbreak.

Zhang’s intervention in a debate about whether Beijing should abandon GDP growth targeting for a second year comes a week before the publication of the government’s annual work report, which is widely expected not to include any target. China’s government reports will be released next Friday and these will include the budget and plans for the economy in 2021, and those targets for fiscal revenue, bank credit growth, employment and income growth are all closely linked to how fast the economy expands, Zhang said.

“The market in general is not expecting a GDP target from the meetings,” Iris Pang, chief China economist at ING Groep NV in Hong Kong wrote in a report this week.

Zhang said the lack of a GDP target last year was mainly due to uncertainty due to the pandemic, but he expects China’s economy to grow around 8% this year as China has the coronavirus outbreak under control. That’s similar to the consensus view, which forecasts growth of 8.4% this year.

The Development Research Center is an think-tank affiliated with China’s top government body the State Council. In the past it has produced influential reports on China’s long-term economic development, partnering with institutions such as the World Bank.

©2021 Bloomberg L.P.

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