China set an economic growth target of ‘above 6 per cent’ for 2021, Premier Li Keqiang confirmed at the National People’s Congress (NPC) on Friday in Beijing
China has set a target of creating 11 million new urban jobs, while the target for consumer price index (CPI) growth is around 3 per cent
China set an economic growth target of “above 6 per cent” for 2021 as the country continues its strong rebound from the impact of the coronavirus pandemic last year, Premier Li Keqiang announced Friday at the National People’s Congress in Beijing. China’s economy is widely expected by analysts to grow by more than 8 per cent this year, helped by the low base from last year’s weak growth. The International Monetary Fund forecast in January that China’s economy would grow by 8.1 per cent in 2021.
“As a general target, China’s growth rate has been set at over 6 per cent for this year. In setting this target, we have taken into account the recovery of economic activity,” Li said in the government work report. In a break from tradition last year, China did not set an economic growth target at the delayed “two sessions” meeting in May as it dealt with the economic fallout from the coronavirus.
China’s economy contracted by 6.8 per cent in the first quarter last year amid widespread lockdowns to contain the spread of Covid-19. But China’s economy rebounded strongly starting in the second quarter and grew 2.3 per cent in 2020 as a whole. While last year’s growth rate was the lowest since the Chinese economy shrank by 1.6 per cent at the end of the Cultural Revolution in 1976, China was the only major economy in the world to record positive growth last year. As expected, Beijing reined in its fiscal stimulus for this year. It reduced the central government’s budget deficit-to-gross domestic product target to “around 3.2 per cent” from 3.6 per cent in 2020.
Beijing set a target of creating over 11 million new urban jobs this year, compared to a target of 9 million last year, and a surveyed urban unemployment rate of 5.5 per cent, compared to around 6 per cent last year.
In 2020, China created 11.86 million new urban jobs, 131.8 per cent of the target.
The target for consumer price index(CPI) growth for the year is around 3 per cent per cent, compared to around 3.5 per cent last year. China’s CPI, which is made up of a weighted price of a basket of consumer goods in the world’s second largest economy, rose 2.5 per cent in 2020 and 0.3 per cent in January compared to a year earlier. It also set the local government special bond issuance quota at 3.65 trillion yuan (US$564 billion), down from 3.75 trillion yuan last year. Li confirmed that “no Covid-19 bonds will be issued” after China issued 1 trillion yuan of special Treasury bonds last year.
“A target of over 6 per cent will enable all of us to devote full energy to promoting reform, innovation, and high-quality development. The projected targets for growth, employment, and CPI should keep the economy performing within the appropriate range,” Li added.
“These targets are also well-aligned with the annual goals of subsequent years in the 14th Five-Year Plan period, and they will help sustain healthy economic growth.” After it was not included in the government work report last year, Li also confirmed a grain output target of over 650 million tonnes for 2021.
He also said China would also “keep the [yuan] exchange rate generally stable at an adaptive, balanced level”. “We will give even greater priority to serving the real economy, and balance the needs of promoting economic recovery and preventing risks. We will see that increases in money supply and aggregate financing are generally in step with economic growth in nominal terms, maintain a proper and adequate level of liquidity supply, and keep the macro leverage ratio generally stable,” he said.
Amid concerns about its population, Li said China would “work to achieve an appropriate birth rate”. He also confirmed that the “statutory retirement age will be raised in a phased manner”. China's overall population continued to grow in 2019, rising to 1.4 billion at the end of the year from 1.39 billion a year earlier.
Beijing did not provide annual population and birth figures for 2020 when it released a series of economic indicators in January. But over the course of January, some Chinese provinces and cities disclosed their own birth data through government and state media reports, and in some cases, birth rates declined more than 30 per cent in 2020 from a year earlier.
Last year, a total 10.035 million of newborns were recorded in the household registration system, known as hukou in China, down from 11.79 million in 2019, according to figures released by the Ministry of Public Security.The figure is not China’s official birth rate for 2020 as the hukou system does not include the entire population, but added to the concerns over the outlook for China’s population.For more than four decades, China’s retirement age has remained unchanged at 60 for men and 55 for women, although it can be earlier for women in blue-collar jobs. But amid the growing concern about a demographic crisis, the current gap has been blamed for stoking gender inequality and wasting human resources.
“We will make all-round efforts to build a healthy China. We will develop a strong public health system, carry out extensive public fitness activities, and raise the average life expectancy by one year,” Li said. Life expectancy in China currently 77.3 years.
“We will implement the national strategy for addressing population ageing, and improve the population services system with a focus on elderly care and child care. We will work to achieve an appropriate birth rate.
“The statutory retirement age will be raised in a phased manner. The multi-tiered social security system will be improved, with coverage of basic old-age insurance reaching 95 per cent of the population. Social assistance and charity systems will also be improved.”