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https://thediplomat.com/2022/05/economic-stimulus-has-become-inevitable-for-china/
China’s economic growth targets and macroeconomic policies, formulated at its annual parliamentary meetings, the “Two Sessions,” face the challenge of a policy adjustment just two months later.
In this year’s government work report, the GDP growth target was set at about 5.5 percent. It also set an expectation for 11 million new urban jobs, while the yearly surveyed urban unemployment rate in China is expected to be 5.5 percent or less. Meanwhile, consumer prices are expected to climb by roughly 3 percent. It is also expected that inhabitants’ incomes would expand at a similar rate to the overall economy. The quantity of imports and exports would be steady, and the balance of payments would be basically zero, according to the forecast. In terms of fiscal policy, the deficit rate is expected to be about 2.8 percent (approximately 3.37 trillion renminbi) this year, which is lower than the 3.2 percent deficit rate (approximately 3.57 trillion RMB) in 2021.
The above goals and policies were set under “normal” circumstances and did not take into account major events such as the Russia-Ukraine war, the resurgence of COVID-19, and the re-imposition of strict pandemic prevention and control measures.
At present, however, current conditions both within and outside of China are not conducive to the country’s economic development. As the Russia-Ukraine war is likely to continue, the volatile global energy and food markets would affect not only Russia and Ukraine, but also the rest of the world, especially emerging markets.
China’s economic growth targets and macroeconomic policies, formulated at its annual parliamentary meetings, the “Two Sessions,” face the challenge of a policy adjustment just two months later.
In this year’s government work report, the GDP growth target was set at about 5.5 percent. It also set an expectation for 11 million new urban jobs, while the yearly surveyed urban unemployment rate in China is expected to be 5.5 percent or less. Meanwhile, consumer prices are expected to climb by roughly 3 percent. It is also expected that inhabitants’ incomes would expand at a similar rate to the overall economy. The quantity of imports and exports would be steady, and the balance of payments would be basically zero, according to the forecast. In terms of fiscal policy, the deficit rate is expected to be about 2.8 percent (approximately 3.37 trillion renminbi) this year, which is lower than the 3.2 percent deficit rate (approximately 3.57 trillion RMB) in 2021.
The above goals and policies were set under “normal” circumstances and did not take into account major events such as the Russia-Ukraine war, the resurgence of COVID-19, and the re-imposition of strict pandemic prevention and control measures.
At present, however, current conditions both within and outside of China are not conducive to the country’s economic development. As the Russia-Ukraine war is likely to continue, the volatile global energy and food markets would affect not only Russia and Ukraine, but also the rest of the world, especially emerging markets.
