China sets GDP target ‘around 5.5%’ for 2022

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Workers weld at a workshop of an automaker in Qingzhou, east China’s Shandong Province, March 1, 2022.

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BEIJING — China has announced a gross domestic product growth target of “about 5.5%” for 2022 as an annual parliamentary meeting gets underway.

Premier Li Keqiang revealed the figure in a speech on Saturday morning local time. It is not uncommon for the official GDP target to be approximate.

The other economic targets announced by Li, for employment and inflation, were the same as last year.

However, he said the deficit-to-GDP ratio would be 2.8% this year, down from 3.2% last year. He expects tax revenue to increase in 2022 and the government to be able to use profits from state-owned enterprises, allowing spending to increase by more than 2 trillion yuan ($316.5 billion) in 2022 from to 2021.

China will target an unemployment rate in cities “no more than 5.5%” and a consumer price index “of around 3%”, according to Li.

“A comprehensive analysis of changing dynamics at home and abroad indicates that this year our country will encounter many more risks and challenges, and we must continue to push to overcome them,” he said. he stated, according to an official English version of his remarks. “The harder things get, the more confident we have to be and the more solid steps we have to take to get results.”

Stimulus plans

Economists generally expected the GDP target to be set at around 5% or slightly higher. They want details on stimulus packages for an economy that has slowed dramatically.

Li said on Saturday that to achieve this year’s economic targets, China must pursue “prudent and effective macroeconomic policies”, with “flexible and appropriate” monetary policy. Li said the yuan exchange rate “will be kept generally stable at an adaptive and balanced level.”

China’s economic growth slowed in the fourth quarter to a year-on-year increase of 4%, despite annual growth of 8.1%.

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The country was the only major economy to grow in 2020, while the rest of the world struggled with the coronavirus pandemic.

But sluggish consumer spending has yet to fully recover from the pandemic, and the fallout from Beijing’s regulatory crackdown on tech and real estate has weighed on growth. China’s strict “zero-Covid” policy, with abrupt shutdowns and travel restrictions, has also weighed on the economy.

Over the past two weeks, heads of government departments have discussed plans for increased economic support, particularly for small businesses and consumers.

The “two sessions” are an annual meeting of the Chinese People’s Political Consultative Conference, an advisory body, and the National People’s Congress legislature in Beijing.

Although largely symbolic, the meetings draw delegates from across the country to approve and announce national economic policies for the coming year. These include targets for GDP growth, employment, inflation, deficit and government spending.

This year, the two sessions will last about a week, with the debates due to end on March 11.

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