China’s next 5-year plan: The devil is in the details
Most analysts have done the math on China’s projected economic growth based on official pronouncements, so the details that came out about China’s 13th five-year plan this week weren’t a surprise. But where the Chinese party leadership is concerned, you never know what they’ll do until they actually do it.
In this vein, IHS Global Insight China economist Brian Jackson notes in a report that the Chinese government is repeating the themes from the previous five-year plans, though they say the themes will grow in importance and specificity. For instance, the government still expects the economy to double in size by 2020, and to do this is needs to post average growth of 6.6% over that period.
The biggest change in the plan was the widely reported move from a one-child policy to a two-child policy. But Jackson notes the easing of the rule largely formalizes changes that were already underway in the country’s birth stance.
The economist also says rather wordily that “the largest macroeconomic implication is defacto affirmation of a 6.5% growth minimum during 2016-2020, which will define the necessary intensity of both reform and stimulus.”
Jackson may be stating the obvious where the 6.5% growth minimum is concerned. But now that the invisible bar has been set, China faces the challenge of hitting or exceeding this target for the next five years.
There’s more to come. Specific economic targets, including quantitative ones will be released in March 2016 and will offer a better handle on the pace and degree of official policy and spending changes needed. You can also count on plenty of official leaks via other official documents in the meantime, Jackson says.