New Business
My Take | Could China ever learn to live with GDP growth of less than 5 per cent?
The way the central government sets and then struggles to meet annual growth targets in recent years has been a bit like watching a Hollywood action movie. There is a brief quiet before the storm, a crisis hits, and then the heroes fight and save the day.
In Beijing’s case – as is often the case at the end of the year – after much anxiety and often alarm, investors and officials collectively heave a sigh of relief. Yes, the target would be exceeded or at least met.
Last year was particularly nail-biting. Typically, the economy is not the main focus of the Politburo’s monthly meeting so late in the year as September. But, given the continuing weaknesses of the economy, the 24-member committee made it the centrepiece.
A coordinated stimulus programme – involving the big gun institutions such as the Ministry of Finance, the People’s Bank of China, and the National Development and Reform Commission – was announced around the time of the meeting.
By the Politburo meeting in December, optimism had returned – the growth target of 5 per cent would be achieved, and it would remain for 2025 as well.
Over the decades, China’s macroeconomic management under state planning, combined with market forces, has become highly sophisticated.
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