China is hosting the annual BRICS summit almost this year. In the picture, Chinese President Xi Jinping speaks on video at the UN General Assembly in New York, USA, on Tuesday, September 21, 2021.
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BEIJING – Chinese President Xi Jinping made a rare statement on Wednesday about his country’s goals for achieving its economic goals for the year.
Investment analysts have cut their forecasts for China’s GDP growth well below the official target after tight controls on Covid have restricted business activity in recent months. Government stimulus has been relatively quiet so far.
“We will intensify the adjustment of macroeconomic policy and take stronger measures to achieve the economic and social development goals for the whole year and minimize the impact of COVID-19,” Xi said on Wednesday, according to a reading of the state media in English.
He did not share details on what kind of measures would be used to support growth. Instead of being “more forceful,” the Chinese text of the state-run speech described the upcoming measures as “more effective,” according to a CNBC translation.
However, Xi’s unusually direct language marks a strange public mention by a senior leader of year-round economic goals since they were set at an annual meeting in mid-March.
These targets include unemployment in cities “no more than 5.5%”, an increase in the consumer price index “around 3%” and GDP growth “around 5.5%” .
CNBC’s average investment bank investment GDP forecast is well below 3.4%.
Bank of America became the last to cut earlier this week, while Nomura has the lowest forecast of 3.3%. Goldman Sachs is the only major investment bank with a forecast of 4% or slightly higher.
“While the recovery in growth appears to have accelerated in June, except for a dramatic easing of policies, we believe that the target of” around 5.5% GDP growth “remains extremely high. challenging this year, “Goldman Sachs analyst Maggie Wei and a team said in a note Wednesday.
In May, Premier Li Keqiang called on officials in an unprecedented mass video conference to “work hard” to grow the second quarter. April and May economic figures indicated the slowest growth since the initial pandemic shock in early 2020.
On Wednesday, he addressed the opening ceremony of the BRICS business forum (Brazil, Russia, India, China and South Africa). China is hosting the annual meeting of developing countries almost this year.
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During his speech, Xi said that China has coordinated both Covid’s control and economic development, and would protect people’s lives and stabilize the economy as much as possible.
Xi said the 20th Congress of the National Party of China in the second half of the year “would set the course for the next phase of China’s development.” He added that China will continue to open up its economy and welcome foreign investment.
The ruling Communist Party of China reorganizes its top leadership at national congressional meetings every five years. Xi is expected to remain president for an unprecedented third term.
Boost car sales
Separately on Wednesday, Prime Minister Li addressed a meeting of the Council of State, the highest executive body, which noted the importance of consumption in boosting economic growth.
The meeting called in particular for measures to support car sales and, as a result, an increase of 200 billion yuan ($ 29.85 billion) in car-related sales was estimated this year.
According to Goldman Sachs, this accounts for about 0.5% of China’s total retail sales in 2021.
Correction: This story has been updated to reflect that Bank of America was the last bank to cut its forecast for China’s GDP. An earlier version did not take this cut into account.