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China economy

Xi Jinping deliberately skipped GDP target during epic congress speech, aide admits

President wanted to emphasise need for quality rather than rapid economic growth in speech opening party congress, official says

PUBLISHED : Thursday, 26 October, 2017, 12:34pm
UPDATED : Thursday, 26 October, 2017, 6:40pm

The omission of a GDP target by Chinese President Xi Jinping during his 3½-hour speech at the opening of the Communist Party congress last week was a deliberate move to tell the country that quality of growth rather than speed now matters most for the world’s second largest economy, an economic aide to Xi said on Thursday.

“China’s growth has shifted from a high-speed growth phase to a high-quality growth phase,” Yang Weimin, a deputy director at the Office of the Central Leading Group on Financial and Economic Affairs, said a press conference in Beijing. “What is the most pressing problem? It is the issue of quality of growth,” he said.

China’s government has stressed the need for more sustainable growth, ensuring that a wider section of society benefits from economic expansion and that development does not come at the cost of higher pollution and other environmental degradation.

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Yang added that Xi’s silence on GDP targets for 2021, the 100th anniversary of the foundation of the Chinese Communist Party, or 2035 when China targets the nation’s “basic modernisation”, was intended to urge the party apparatus to better implement new ideas about growth and to focus on issues of “imbalance and inadequate development”.

The press conference, a day after China’s new leadership line-up was named, was held to explain the policy implications of the 19th Party Congress, which enshrined Xi’s name in the party constitution and cemented his grip on power.

Yang did not specify whether China would drop its practice of setting annual growth targets.

The country’s premier usually announces growth targets during their work report at the annual National People’s Congress in Beijing. Premier Li Keqiang set a growth target of “about 6.5 per cent, or higher if possible” at this year’s event.

China’s headline growth rate in the first three quarters of 2017 was 6.9 per cent, making it one of the fastest growing major economies in the world.

Larry Hu, chief China economist at Macquarie Group, wrote in a research note that while the Chinese leadership had “spent lots of time in the past five years stimulating the economy”, Xi’s consolidation of power “should make them more tolerant about growth volatility”.

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The fact that Xi did not mention any growth target meant “China’s economic growth could have another leg down to around six per cent in the next year or two”, Hu wrote.

Yang told the press conference that China was 15 years ahead of its strategic development schedule.

“In the past, the Chinese Communist Party thought China would realise basic modernisation by the middle of this century, but now we can achieve that target by 2035. In other words, we are 15 years ahead of our original plan,” he said.

Xi said in his speech last week that China should become a modernised and powerful socialist country by 2050.