"Projected Annual Growth of 3~4% Over 3 to 5 Years"
As the Chinese government has announced strong stimulus measures to revive the economy next year, there are forecasts that growth will be limited to an average of 3-4% annually over the next 3 to 5 years. In recent years, China has set an economic growth target of around 5%, but the actual growth rate has been lower, and even with large-scale stimulus measures, it is pointed out that reaching the 5% target will be difficult.
According to Bloomberg News, Gao Sanwen, Chief Economist at China SDIC Securities, stated on the 12th (local time) at an event hosted by the Peterson Institute for International Economics in Washington DC, USA, "My guess is that the official figures for the past 2-3 years (economic growth rate) are close to an average of 5%, but the actual figures are probably around 2% on average."
Economist Gao said, "I think it is more reasonable to expect 3-4% growth over the next 3 to 5 years, but we know that the official figures will always be around 5%. We do not know the exact figures for China's real growth rate and other economic indicators. Many people speculate that these figures may not be accurate after the COVID-19 pandemic," he added.
In particular, Economist Gao emphasized the need for in-depth reforms, stating that China's economic growth continues to be hit by the real estate slump and local government debt crisis. Having served as an advisor to Chinese regulatory agencies and senior officials, he previously gained attention for his analysis that severe youth unemployment in China is causing consumption to lose momentum.
This year, China set an economic growth target of around 5%, but has faced difficulties due to prolonged real estate downturn, local government debt, and sluggish consumption. In response, starting with a long-term liquidity supply of 1 trillion yuan (approximately 197 trillion won) in September, China has successively announced interest rate cuts, stock market stabilization, and real estate market stimulus measures.
This week, the Central Economic Work Conference was held with the attendance of Chinese President Xi Jinping and other leadership, deciding the economic policy direction for next year and signaling a more proactive fiscal policy for the coming year. Specifically, it was decided to expand the fiscal deficit ratio and issue ultra-long-term special government bonds, and to continue liquidity supply measures such as lowering the reserve requirement ratio (RRR) and interest rates. Additionally, among the key initiatives, domestic demand, which was mentioned for the second time last year, was placed at the forefront. China's economic growth target for 2025 is expected to be announced at the National People's Congress in March next year.
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