China’s president, Xi Jinping, announced Tuesday that a 6.5 percent target had been made for economic growth. The Communist Party and the national government set the plan for the years 2016 to 2020.
China’s economic growth has been slowing down in recent years. The announcement all but dismissed the idea of China reaching a double digit annual growth rate as in recent decades. The five year plan was discussed at a recent meeting in Beijing. The plan is expected to be completed by next spring by the National People’s Congress. This is China’s thirteenth five year plan but there is optimism about China reaching their goal.
The 6.5 percent target is the same figure that was used by Prime Minister Li Kequiang during a speech in South Korea. Both leaders believe the target must be met in order for China’s per capita income to double. Xi Jinping stated that “no less than 6.5 percent” would be necessary for China to succeed.
The hopes of this plan is to narrow the income gap in China. Also, the five year plan is to help raise the proportion of the middle-class income population.
The gross domestic product per capita in China at the current time is about $7,800. With the development plan that is in place right now, the annual growth target was 7 percent. The current development plan ends this year.
The goals of the new plan are to eliminate rural poverty; promote the inclusion of the Chinese currency, which is renminbi, in the International Monetary Fund’s basket of currencies, and attract foreign investments. Also, China would create a Green Development Fund that would promote clean industries and sustainable growth.
President Xi Jinping of China on Tuesday.
During a four day meeting in which the Central Committee met, they announced that they were changing their one child policy of family planning to a two child policy of family planning. This has been put in place as an attempt to stimulate economic growth. By changing the policy on how many children couples should have, this should show a boost in consumer spending.
Although the Chinese economy grew 6.9 percent that is a slow growth rate for China. It is the slowest they’ve had since the financial crisis in 2009. Xi Jinping is pushing more for a large service sector and more consumers spending.
Xi Jinping has been painted as a visionary of the Deng Xiaoping thinking. Den Xiaoping was a dominate leader back in 1978 who transformed the economy for the next few decades. Xi Jinping who is also the general secretary of the party seems to follow closely to this ideology.
More detailed strategies will be given once the plan is endorsed by the National People’s Congress next spring. Some of the highlights will be changes in energy, the environment, trade and some other areas. Scott Kennedy, a researcher on Chinese economic policy at the Center for Strategic and International Studies in Washington stated, “The plan serves as the most authoritative statement on the state’s priorities. The party, government agencies, financial institutions and companies then spend a great deal of effort aligning themselves with these priorities.”
Be the first to comment on "5 Year Plan for 6.5% Economic Growth in China"