China to set lower GDP growth target of 6-6.5 per cent in 2019

BEIJING: China plans to set a lower economic growth target of 6-6.5 per cent in 2019 compared with last year’s target of “around” 6.5 per cent, policy sources said, as Beijing gears up to cope with higher US tariffs and weakening domestic demand.
The proposed target, to be unveiled at the annual parliamentary session in March, was endorsed by top leaders at the annual closed-door Central Economic Work Conference in mid-December, according to four sources with knowledge of the meeting’s outcome.
Data later this month is expected to show the Chinese economy grew around 6.6 per cent in 2018 — the weakest since 1990. Analysts are forecasting a further loss of momentum this year before policy support steps begin to kick in.
“It’s very difficult for growth to exceed 6.5 per cent (this year), and there could be trouble if growth dips below 6 per cent,” said one source who requested anonymity due to the sensitivity of the matter.
As the world’s second-largest economy loses steam, China’s top leaders are closely watching employment levels as factories could be forced to shed workers amid a trade war with the United States, despite a more resilient services sector, policy insiders said.
Growth of about 6.2 per cent is needed in the next two years to meet the ruling Communist Party’s longstanding goal of doubling gross domestic product and incomes in the decade to 2020, and to turn China into a “modestly prosperous” nation.
“Considering employment, income and stability, we need growth of at least 6 per cent this year,” said one of the sources.
Adopting a range as a target would give policymakers room to manoeuvre amid uncertainties caused by a tit-for-tat tariff war with the United Sates, as the two sides strive for a possible deal to settle their differences before March. — Reuters