China’s Growth Target Under Scrutiny: A Call for Lowered Expectations
As China gears up for the next five years, a former senior economic planner is advocating for a downward adjustment in the country’s annual growth target. Xu Lin, who was heavily involved in shaping Beijing’s five-year plans during his tenure at the National Development and Reform Commission, believes that a more modest growth goal is necessary. This recommendation comes amidst growing tensions with the United States and the pressing need to address entrenched structural issues within China’s economy.
Xu Lin emphasized that the current economic landscape, characterized by a challenging global environment and internal obstacles such as property market volatility and mounting debt levels, warrants a more cautious approach. In an interview with Comparative Studies magazine, Xu suggested that a growth target of around 4 percent over the next decade would be more realistic. This adjustment takes into account China’s demographic challenges, declining savings rates, and sluggish production levels, all of which are contributing to a more subdued growth outlook.
The absence of a specific growth target in China’s 2021-2025 development plan has left room for speculation among experts and analysts. While some projections point to a growth rate exceeding 4.8 percent annually until 2035, based on the government’s ambition to double the country’s GDP by that time, Xu Lin’s proposal offers a more cautious perspective. With a focus on sustainable employment growth and prudent management of debt levels, a 4 percent GDP expansion could align more closely with China’s long-term economic objectives. Despite uncertainties surrounding the global economic landscape, recalibrating growth expectations could pave the way for a more stable and resilient growth trajectory in the years to come.
