Chinese official says 6.5% growth target hard to hit
Who says all Chinese officials have to be politically correct?
Li Wei, president of the State Council’s Development Research Center, broke ranks with the government’s official stance on the economy and said Monday that slowing global demand and rising labor costs at home will make it very difficult for China to achieve above 6.5% over the 2016-2020 period at a conference over the weekend, according to the China Securities Journal newspaper.
“In the last 30 years of reforms and opening up, China’s gross domestic product has posted annual growth of around 10%,” said Wei. “Against this, 6.5% is not high, but it will be very difficult to achieve this pace of growth.”
Wei said the main reason for his view were a likely global economic slowdown, rising labor costs that were eroding China’s competitive advantage, and growing environmental concerns which meant that the country could not industrialize arable land at as rapid a pace as before.
Depending on how you look at it, the remarks are either a welcome dose of reality or a shot across the bow at President Xi Jinping who has said that China must keep annual average growth at no less than 6.5% over the next five years to hit the country’s goal of doubling gross domestic product and per capita income by 2020 from 2010. While Xi is right, China needs to grow at that rate to double in five years, Wei says it isn’t going to happen.
China is set to release fourth-quarter and full-year GDP data on Jan. 19. It is expected to report 2015 growth cooled to around 7%, the slowest in a quarter of a century.