China GDP: Beijing cites ‘policy flexibility’ as reason for dropping specific growth target for 14th five-year plan
- Unlike in previous years, the 14th five-year plan for 2021-25 does not specify an economic growth target
- China’s top economic planning agency says this gives Beijing more ‘policy flexibility’ to deal with uncertainty
China has for the first time abandoned an overall economic growth target in its next five-year plan to provide the government flexibility to cope with risks at home and abroad, the country’s top economic planning agency said on Monday.
Hu Zucai, the deputy director of the National Development and Reform Commission, said this gave Beijing more policy flexibility.
“It leaves room to deal with the uncertainties. It is also good for guiding all parties to focus on improving the quality and efficiency of development,” he said at a press conference on Monday.
It does not mean that China will not need a GDP growth rate any longer
“[But] it does not mean that China will not need a GDP growth rate any longer.”
Traditionally, the economic growth target in five-year plans has acted as a road map for development and been tied to the careers of top political officials across the country. Gross domestic product (GDP) competition among local governments has played a crucial role in supporting China’s growth miracle over the past four decades.
However, following the impact of the coronavirus pandemic and rising debt risks associated with pursuing unrealistic growth targets, some academics and advisers called on Beijing to adjust its macroeconomic evaluation system and potentially abandon annual GDP targets.