Lower growth target shows new economic priorities

By Yi Xianrong
0 Comment(s)Print E-mail People's Daily, March 10, 2016
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In the 2016 government work report delivered by Chinese Premier Li Keqiang Saturday, China's GDP growth target for 2016 was set in a range of between 6.5 and 7 percent, and the country's basic economic policy will be geared toward this.

Over the past two decades, the central government has been pursuing rapid growth, and this is the first time in 20 years that the annual growth target has been set below 7 percent, so it can be considered a significant move.

The target allows the government to shift away from solely pursuing GDP growth, and wholly alters the former idea of aiming for extensive but inefficient growth. This could fundamentally change the government's behavioral pattern and policy direction, paving the way for China to head for higher quality and improved efficiency in its growth, and also making room for bold reforms and economic restructuring.

Compared to the previous growth targets that were comparatively high and usually fixed to a specific figure, this year's goal is within a certain range, allowing more flexibility. If both the domestic and international economic situations are favorable, China's growth rate could reach 7 percent. But if the domestic and international environment is more challenging, it could drop to 6.5 percent. In either case, the government does not have to pursue growth for growth's sake.

The target range for 2016 allows the government to pursue significant economic reforms and restructuring. In the past, when high growth rates were pursued, the slash-and-burn approach to business operation and misuse of resources damaged the environment and natural resources, leaving piles of economic problems behind, including environmental degradation, imbalanced industrial structure, excessive capacity in certain industries, and over-dependence on the real estate sector. Addressing these issues is bound to influence GDP, but an obsession with rapid GDP growth could make these issues even worse.

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