GDP target of around 5.5% ‘achievable’
Government urges more expansionary fiscal and monetary policy this year. Political advisers and experts said Wednesday that China is well-positioned to meet its GDP growth target of around 5.5 percent, as it has ample room for macroeconomic policy to cushion short-term pressures. They also said China should step up its efforts to lay a solid foundation for long-term high-quality development by nurturing new growth engines such as technological innovation, while avoiding careless stimulus that could lead to a deterioration in the economic structure. Liu Shijin, deputy director of the Economic Committee of the National Committee of the Chinese People's Political Consultative Conference, said: "This year's GDP growth target does face challenges, but it can still be achieved through hard work." Macroeconomic policies will be adjusted against short-term headwinds, while emerging structural drivers, such as city clusters, the digital economy and green transition, will also play an important role in pulling the economy, Liu said. The People's Bank of China announced on Tuesday that it will hand over more than 1 trillion yuan ($158.3 billion) in profits to the Ministry of Finance to stabilize the economy by about 5.5 percent after the government work report sets a GDP growth target for this year, and pledged to do more to boost measures of growth. Wang Tao, chief China economist at UBS Investment Bank, said she expects China's economy to hit its growth target of 5.4 percent year-on-year as fiscal and monetary policies are likely to ease further. Fiscal policy has become more aggressive because the broad deficit-to-GDP ratio could hit 7.2 percent this year, up 2 percentage points from last year, taking into account off-budget funds, including remittances from the People's Bank of China, she said. In addition, Wang said the rise in energy prices due to geopolitical tensions may be temporary and therefore have limited impact on monetary policy, and the People's Bank of China still has room to lower the reserve requirement ratio to facilitate credit expansion. China's consumer price index rose 0.9 percent in February from a year earlier, the National Bureau of Statistics said, unchanged from January, with lower pork prices offsetting higher oil prices. Wednesday. Yu Yongding, a senior economist at the Chinese Academy of Social Sciences, said the government should adopt more expansionary fiscal and monetary policies than last year to achieve this year's growth target. "It would be wise to expand fiscal spending to boost infrastructure investment, which is a key buffer against the slowdown in real estate investment," Yu said. While recognizing the broad scope for macroeconomic policy, experts warned against any careless stimulus measures that could undermine long-term development, and emphasized accelerated economic upgrades for sustainable growth. We must focus on solving the weak links of the real economy and focus on cultivating structural power, including improving the efficiency of basic industries, increasing the middle-income population, and strengthening research and development in the field of basic science. With the structural driving potential being realized, China is likely to maintain high-quality and sustainable medium-speed economic growth not only this year, but also throughout the 14th Five-Year Plan (2021-25) period, Liu said. Zhang Ying, president of Dassault Systèmes Greater China, said the French industrial software company is optimistic about the Chinese market, as new infrastructure and technological innovation remain at the top of the country's efforts to stabilize growth. "We believe that a more open China will promote the upgrading of its own economy while making important contributions to the global economic recovery," Zhang said.