Business News: China targets GDP expansion above 6% in 2021.
China has set a growth target of more than 6% for 2021, Chinese Premier Li Keqiang announced Friday at an annual parliamentary meeting, the most important political event of the year.
Such growth would come from a low base. China recorded GDP growth of 2.3% last year, the only major economy to expand during the coronavirus pandemic. The country’s official economic data is often questioned for its accuracy.
Li announced the growth goal in a government work report delivered at the opening ceremony of the National People’s Congress. The meeting is part of Beijing’s annual “Two Sessions” parliamentary gathering that sets national economic and political priorities for 2021.
With growth momentum now at pre-virus levels, Beijing policymakers have signaled that they intend to gradually withdraw stimulus measures and instead focus on containing debt and eliminating an emerging housing bubble.
Mr. Li said in Friday’s annual report that the government will seek to cut China’s fiscal deficit target to 3.2% of projected GDP this year, compared to a target of more than 3.6% in 2020.
Beijing also plans to reduce the amount of debt local governments are allowed to raise, allowing localities to issue 3.65 trillion yuan, the equivalent of $ 580 billion, in local government bonds in 2021. from 3.75 trillion yuan allocated last year. The proceeds from the bond mainly finance infrastructure projects.
Beijing also aims to keep money supply growth and total social financing on par with economic growth. The premier called on the nation’s largest commercial banks to maintain lending growth of at least 30% to small businesses and to extend the reduction in lending to small business borrowers hard hit by the pandemic.
The government also said it will keep export and import volumes stable this year, increase bank lending to the manufacturing sector, and expand investment in upgrading industry equipment.
Strengthening science and technology development was a major task of the year, Li said. He noted that “in preventing and defusing risks in the financial sector and other areas, we face formidable tasks.”
As for international trade, Li said the country “will 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 that China will work to accelerate free trade negotiations with Japan and South Korea and will actively consider joining the comprehensive and progressive agreement for the trans-Pacific partnership.
The CPTPP trade deal was formerly known as the Trans-Pacific Partnership, which former President Donald Trump withdrew from the United States from immediately after the inauguration in 2017. It is still unclear whether President Joe Biden’s administration will push the United States to rejoin the deal.
The tensions that have increased between China and the United States in recent years have changed from just trade in areas like technology and controversies over the origins of Covid-19.
In prepared remarks, Li said Friday that there were still “weak links” in China’s control of Covid-19, but that the economy had sufficiently recovered.