The Chinese government may not set a pre-set economic growth target in 2021 for the second year in a row for fear that setting a target could encourage provinces to increase their debt, Reuters said on Jan. 28, citing multiple policy sources.
Even so, the sources said, “there will actually be a target,” but they just won’t stress the importance of achieving them “at any cost. China is still discussing this internally ahead of the March congress, and the National Development and Reform Commission is eager to set growth targets. At the same Time, Chinese policymakers worry that tying official plans to explicit economic growth targets could encourage local governments to pursue higher economic growth, which in turn could lead to higher debt.
The report said internal calls for no growth targets had been rising before the outbreak since Communist Party leader Xi Jinping declared in 2017 to pursue high-quality economic growth, reduce reliance on debt-led stimulus and encourage stronger productivity investment. China did not set an economic growth target last year for the first time in 18 years due to the impact of the Epidemic.
The sources also said Beijing is expected to set its Inflation target at about 3% this year, lower than last year’s target of about 3.5% but higher than last year’s actual inflation rate of 2.5%.
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