China claims its annual GDP goal is more ‘guidance’ than target as it appears set to fall short

Country’s full-year GDP growth is expected to reach around 4%, falling well short of 5.5% target

Conspicuous non-consumption: A shopper walks inside a nearly empty Beijing shopping mall (AFP via Getty)

China’s economic growth target of 5.5 per cent should be treated as “guidance” and not a hard target, the country’s leaders reportedly told government officials last week as Beijing appeared set to miss the goal by a large margin.

In the meeting with ministerial and provincial-level officials, the leaders said they would not be penalised for failing to achieve the target, nor would it be used as a basis to evaluate their performance, reported Bloomberg, citing sources.

They also allegedly acknowledged that China was unlikely to meet the target.

China last week pledged to achieve the best possible results for the economy this year as it reined back on its previous assertion that it would strive to meet the 2022 growth target.

The country’s GDP in the first half of the 2022 financial year grew only 2.5 per cent from the previous year, hinting at a huge pressure in the second half, amid fears of a global recession and uncertainties from the war in Ukraine.

In the second half, the country should rather focus on stabilising employment and prices, maintaining economic operations within a reasonable range and striving to achieve the best possible results, reported Xinhua news agency on 28 July after the 25-member politburo chaired by president Xi Jinping met to assess the economy.

The omission of the GDP target was in sharp contrast to the earlier politburo meeting in April, when the leaders vowed to “strive to meet economic and social targets” for this year.

While the country narrowly avoided contracting in the second quarter following its harsh Covid-19 lockdown and restrictions, analysts believe that Beijing’s full-year growth target of 5.5 per cent seem increasingly unattainable.

China, which is the world’s second-largest economy behind the United States, last missed its growth target in 2015.

Despite the slow growth rate, the leadership has shown its reluctance to budge from the “dynamic zero-Covid” policy, reported Xinhua.

According to a Reuters poll of economists this month, China’s full-year GDP growth is expected to reach around 4 per cent.

The authorities’ steps to stabilise the country’s economy include expanding tax credit rebates, accelerating local government special bond issuances to buoy infrastructure investments and reducing car purchase tax.

Additional reporting by agencies