China should aim for at least 5 percent GDP growth next year and move urgently to lift the economy from its COVID-19 pandemic slowdown, a Chinese central bank adviser and prominent state-linked economist said.
If China can “largely or completely get rid of the impact of the pandemic in the first half of next year” and implement various policies to stabilize the economy, actual growth could be higher than 5 percent in 2023, Liu Shijin (劉世錦), a member of the monetary policy committee of the People’s Bank of China (PBOC), said in a speech at the Caixin Summit in Beijing yesterday.
“The urgent priority now is to get economic growth back to a normal track and reasonable range,” he said, adding that the current rate of expansion being too low is bad for long-term development goals.
Photo: REUTERS
An extended downturn would damage productivity and the yuan exchange rate, he said, adding that cities that were locked down to curb the spread of COVID-19 suffered long-lasting economic damage.
Favorable conditions are increasing after recent steps were taken to address the impact of “zero COVID-19” policies on the economy and ease a property downturn, Liu said.
The country should aim for an average GDP growth of 5 percent for the next two years, as it is difficult for growth to reach that level this year, Liu said.
Photo: Bloomberg
The government has downplayed its official GDP target of “around 5.5 percent” for this year amid a sharp slowdown in growth, with economists polled by Bloomberg forecasting just 3.3 percent for the year.
To achieve China’s goal of becoming a “medium-developed country” by 2035 and double per-capita GDP, the economy needs to grow at an average speed of 4.7 percent until then, Liu said, adding that it would be difficult.
Another way to achieve the 2035 goal would be to improve overall productivity, he said.
Doing so would lead to the appreciation of the yuan against the US dollar, similar to what happened in Japan and Germany in the two decades following the 1970s, he said.
Several other economists with Chinese government connections also authorities to address downbeat growth at the Caixin conference.
Yang Weimin (楊偉民), a senior economic official at the Chinese People’s Political Consultative Conference, the country’s top political advisory body, called on authorities to “make a strong push” to get growth back on track next year.
“Economic growth this year is not within a reasonable range, and the biggest risk to economic development now is that the growth rate is too low,” Yang said.
Huang Yiping (黃益平), a Peking University professor and a former PBOC adviser, called for more government spending on public welfare next year to support consumption.
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