China’s economic growth may drop to 5 per cent a year at start of next decade, says central bank researcher

China’s economic growth is likely to slow to around 5 per cent annually between 2021 to 2025 from an expected annual rate of 6.5 per cent in the next five years, a senior Chinese central bank official was reported by official media as saying on Thursday.

The recovery of China’s economy will be “L-shaped”, Yao Yudong, head of the Peoples’ Bank of China’s Research Institute of Finance and Banking, told a forum in Shenzhen, the Securities Times reported on its website.

Yao said the world’s second largest economy has shown some positive signs, but the government needs to push forward reforms to ensure long-term growth momentum.

China aims to keep average annual economic growth at or above 6.5 per cent in the next five years, although Premier Li Keqiang acknowledged that leaders face “a tough battle”.

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Chinese leaders have also set an economic growth target of 6.5 per cent to 7 per cent for this year, introducing a range rather than a more precise target as it seeks greater flexibility in juggling growth, job creation and restructuring “zombie companies” in bloated industries.