China’s leaders are too obsessed with the GDP growth rate, says S&P chief economist
Paul Sheard says it’s time for Beijing to focus on building a framework that delivers sustainable, long-term growth
China should shift its focus from short term growth to building up a framework to sustain long term economic development, says ratings agency Standards & Poor’s chief economist Paul Sheard.
“China loves a lot of planning, whether it be a five-year plan or a 10-year plan,” Sheard told the South China Morning Post in an interview at the Boao Forum for Asia.
But the planning often leads to disappointment among foreign observers in China, said Sheard, as policy actions do not always match with policy aspirations.
He cited the slow pace of reforms of state-owned enterprises and the banking system as examples.
The Chinese government is also failing to meet observers’ aspirations when it comes to dealing with credit and investment booms.
Economic development is not driven by short-term growth
Sheard said it was partly because policy makers are too focussed on hitting short-term economic growth targets and trying to maintain a high growth rate.