China GDP: what can be expected from December’s economic work conference?
- The closed-door work conference is widely viewed as an opportunity to get a glimpse of thinking among new economic officials
- A growing chorus of policy advisers is calling for a bigger dose of stimulus and the need to set an explicit GDP growth target
The Communist Party is expected to convene its annual central economic work conference in mid-December, an event that will be closely watched by investors who are eager to see solutions offered up for some of China’s most pressing economic risks, including coronavirus disruptions and a property downturn.
China’s new leadership is facing economic challenges unseen in the past two decades, with growth slowing far slower than expected and external headwinds mounting.
Many of the conventional macroeconomic policies rolled out by policymakers have failed to work as intended given Beijing’s unrelenting zero-Covid policy, which has also exacerbated uncertainty and frustration among private businesses.
Now, a growing chorus of government advisers are now calling for a bigger dose of stimulus and the need to set an explicit gross domestic product (GDP) growth target for next year ahead of the meeting.
“China should set a growth target of more than 5 per cent next year. It should try to ensure an expansion of around 5 per cent on average in 2022-23,” said Liu Shijin, a central bank adviser and former deputy director of the Development Research Centre of the State Council.
Speaking at the China Macroeconomy Forum last weekend, Liu said slower growth would jeopardise total-factor productivity, dampen business and affect the country’s ability to change development model.