Free Press Journal

China may cut GDP target to 6.5% amid economic slowdown


Beijing: China may cut its GDP growth target to 6.5 per cent from 7 per cent in its next five year plan from next year at the top policy body of the ruling Communist Party’s meet beginning here tomorrow amid continued slowdown of world’s second largest economy. The fifth plenary session of the Communist Party of China (CPC) Central Committee which will be presided over by the CPC Central Committee’s General Secretary and President Xi Jinping will deliberate 13th five year plan (2016-2020) for economic and social development.

Ahead of the four-day meeting, official reports quoted Premier Li Keqiang as saying that China’s economy which slipped below the seven per cent in the Q3 for the first time since 2009 does not need to grow seven per cent this year. “First, 6.9 per cent is about 7 per cent, which is in a reasonable range,” Li was quoted by People’s Daily. “We never said we must defend any target to the death,” he said.

China may cut its GDP growth target to 6.5 per cent in the next five years, a further decrease from this year’s goal of 7 per cent, a recent report in Economic Information, a newspaper affiliated to state-run Xinhua news agency said. Till now Chinese government has set 7 per cent as the target amid the continued slowdown. Recent IMF forecast said China’s growth is expected to slow from 7.3 per cent in 2014 to 6.8 per cent this year and 6.3 per cent in 2016 as the country struggles with its shift from export oriented economy to the one driven by consumption.

The new five year plans takes into the consideration of the current slowdown and lay out institutional Party reform plans to guarantee a better and effective national leadership, officials said.

China has drawn Five-Year Plans since 1953 to map strategies for overall economic and social development, setting growth targets and defining development policies. Besides efforts to address to halt the slowdown and carry forward the urbanisation process, the new plan’s thrust was expected to lift 70.17 million people who are still below poverty in China by 2020.

It meant that a million people have to be lifted to above poverty line every month specially when the world’s second largest economy is on down word trajectory.

In the past 15 years, China has lifted more than 600 million people out of poverty, accounting for about 70 per cent of those brought out of poverty worldwide, according to Hong Tianyun, deputy director of the State Council Leading Group Office of Poverty Alleviation and Development.

Despite this, China still had 70.17 million people in the countryside living below the country’s poverty line of 2,300 yuan (USD 376) in annual income at the end of last year. The 13th Five Year Plan will also look at China’s deepening demographic crisis, state-run CCTV said. China’s senior citizens over 65 years old make up over 10 per cent of the country’s population and the ratio may rise to a third by 2050. A country is considered an ageing society if the ratio is higher than 7 per cent.

According to last year’s official report China had about 185 million people above the age of 60, or 13.7 per cent of the population. The figure is expected to surge to 221 million this year, including 51 million “empty nesters,” or elderly people whose children no longer live with them, which makes it incumbent on the part government to improve their social security management involving large amount of funds.