China sets GDP growth target of over 6 per cent this year

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BEIJING – China has set an annual gross domestic product (GDP) target of over 6 per cent for this year despite continuing global uncertainties caused by the Covid-19 outbreak.

In presenting his yearly work report on Friday (March 5) at the opening of parliament season, Premier Li Keqiang said the target takes into account the country’s economic recovery.

China’s GDP grew by 2.3 per cent last year despite the devastating effects of the pandemic, making it the only major economy in the world to post a positive expansion.

“A target of over 6 per cent will enable all of us to devote full energy to promoting reform, innovation, and high-quality development,” said the premier.

Last year, China did not set a GDP target for the first time since 1990 after the coronavirus outbreak upended the economy.

Economists expect China’s economy to grow between 7 and 9 per cent this year, as the world’s No. 2 economy embarks on an aggressive drive to develop technological self-reliance especially in semiconductor chips, artificial intelligence and next-generation telecommunications, and boost domestic consumption.

The Biden administration has indicated that it intends to work with allies to restrict certain technology from being sold to China.

Beijing is also likely to court an average yearly economic growth of 5 per cent over the next 15 years to hit the target of doubling its GDP by 2035 from now, said Dr Yue Su, principal economist at The Economist Intelligence Unit.

“It will be challenging, however, to achieve this given the constraints in population structure and debt burden. The absence of breakthroughs in market reform is another challenge,” she said.

China is forecast to surpass the US to become the world’s largest economy by 2028, five years earlier than previous projections as the two economies diverge over their post-Covid-19 recovery.

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