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China economic slowdown: debate heats up on whether Beijing should shoot for 6 per cent growth in 2020
- Economic heavyweights in China are torn on whether Beijing should inject the levels of stimulus that would be needed to achieve 6 per cent growth next year
- Yu Yongding, noted economist, said 6 per cent should be top priority, while others such as Gao Shanwen said it is an unrealistic target
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Orange Wangin Beijing
A debate is heating up among influential economists in Beijing as to whether China should take steps to defend a 6 per cent growth rate next year, ahead of a key economic policy-setting meeting this month.
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China’s growth rate dipped to exactly 6 per cent in the third quarter this year, the basement of the government’s 6.0 to 6.5 per cent growth target range for 2019 and the lowest rate in nearly 30 years.
Most analysts expect growth to fall below 6 per cent in the fourth quarter and slow further early next year, ahead of full year growth of below 6 per cent, barring a major rollback of tariffs in the trade war with the United States.
To ensure growth of at least 6 per cent next year would require more aggressive economic policy stimulus than the government has heretofore been willing to consider.
Premier Li Keqiang has continually ruled out the all-out stimulus China pursued a decade ago in response to the global financial crisis, due in part to avoid adding to already high debt levels.
But the debate, nonetheless, has intensified in recent weeks ahead of the annual Central Economic Work Conference, due to take place in the coming weeks, at which senior officials will set economic policy priorities for next year, including the growth target.
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Those in favour of maintaining a target of at least 6 per cent warn that lower growth will aggravate existing domestic problems that are already being made worse by the trade war.
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