China should mull a 4% GDP target, focus on jobs, debts in next 5 years: former official

A former senior economic planner has called for China’s annual growth target to be lowered for the next five years, factoring in the likelihood of a protracted rivalry with the United States and the need to solve deep-rooted structural problems in China.

Xu Lin, who helped draft Beijing’s five-year plan for decades while an official at the National Development and Reform Commission, made the comments as the world’s second-largest economy is increasingly relying on economic planning for continued growth.

Compared with some market estimates of around 4.5 per cent annual growth from 2026-30, he said the potential growth rate and growth target figure should be around 4 per cent in the next five to 10 years, owing to China’s shrinking population, its falling savings and production rate, and other headwinds.

“It is inappropriate to set a target higher than the potential growth in China’s 15th five-year plan, if considering the complex international environment and domestic difficulties such as property, the debt down-cycle and weak market confidence,” Xu told Comparative Studies magazine in an interview published on social media on Tuesday.

“An annual 4 per cent GDP growth would be very good if employment can be expanded and the debt ratio is controlled,” said Xu, who is now academic director of the Pangoal Institution, a Beijing-based think tank, and also chairman of China-US Green Fund.

China did not give a quantitative growth target in its 2021-2025 development plan, but the market has largely been estimating an annual expansion of at least 4.8 per cent until 2035 based on leadership’s goal of doubling the country’s gross domestic product by then.

South China Morning Post