China on Tuesday set its 2019 GDP growth target at 6-6.5 per cent — lower than the annual 6.6 per cent growth witnessed last year — according to a government report quoting National Bureau of Statistics figures. The country, however, stated that the 2019 growth projection, lowest target set in nearly three decades, was “comparatively high” among major economies in the world and is in accordance with domestic and international expectations.
China also said it will lower its defence budget growth rate to 7.5 per cent in 2019 from 8.1 per cent last year. The defence budget will be 1.19 trillion yuan, a state media report said.
GDP figures in China seen together with India’s show that two of the world’s fastest growing economies have been slowing down. In India, figures released in February 2019 shows that the overall GDP growth estimate for 2018-19 was revised downwards to a five-year-low of 7 per cent as against the Reserve Bank of India’s projection of 7.4 per cent for this fiscal.
On Tuesday, the Chinese report presented by Premier Li Keqiang at the 13th National People’s Congress in Beijing noted that China has taken a “pragmatic approach” and made a “moderate adjustment” to the projections. This is on the “basis of a thorough assessment of destabilising factors and uncertainties affecting the economic performance,” the report states.
In the context of the protracted trade dispute between China and India, Li said that his country will continue to promote China-US trade negotiations. China is committed to safeguarding economic globalisation and free trade and actively involved in the reform of the World Trade Organization, he said.
Soon after the GDP target was announced, an opinion piece on the official news agency Xinhua noted: “…one should not make a fetish of the growth rate. Also, economic slowdown is not necessarily a siren, not to mention a drag on the global growth.” It said that the “key reason” for the slowdown is a shift in the Chinese government’s growth model from an “investment export-driven one” to a “more sustainable style that draws strength from consumption, services and innovations.”
The report also set the year’s target for urban job creation at above 11 million and said the targets for the survey-based and registered urban unemployment rates are about 5.5 per cent and below 4.5 per cent, respectively.
“The target for urban job creation takes into account new entrants to the workforce in 2019, and allows leeway for arrangements to be made for workers displaced due to overcapacity cuts, workers returning to the workforce after unemployment, and rural residents moving into confirm jobs,” the report states.
China has also said that contribution from scientific and technological advances to economic growth will reach 59.2 per cent and Research and Development spending as a percentage of GDP will rise to 2.2 per cent. According to reports, it also promised “further improvements” to the environment committing to a cut in PM2.5 concentrations by 2 per cent in cities at and above prefecture level that fall short of the national standards. It also noted that energy consumption per unit of GDP will decrease by about 3 per cent and carbon dioxide emissions per unit of GDP will fall by about 3.6 per cent and emissions of major pollutants will continue to decline.
“In giving greater weight to these indicators, which reflect the quality and effect of growth and the structural adjustments of the economy, we want to primarily ensure that we are acting on the new development philosophy, putting the vision of people-entered development into practice and following the principle of giving priority to the quality and effect of growth,” the report states.