Eyes on China's 'Jungang Gyeongje Gongjak Hoeui'

Xi Jinping's Third Term First Year Economic Growth Target Set
Possibility of Not Disclosing Target Like During 2020 Pandemic

[Asia Economy Senior Reporter Cho Young-shin] As the Central Economic Work Conference, which can gauge the direction of China's economy, approaches, attention is focusing on China's economic growth for next year.

[Image source=Yonhap News]

Some quarters are concerned that Chinese President Xi Jinping emphasized "common prosperity (a society where everyone eats well and lives well, a distributive society)" at the 20th National Congress of the Communist Party (hereafter Party Congress), and that China's economy will not grow as it did in the past five years. In capital markets such as securities, there are also worries about a "China run" phenomenon. Accordingly, the whole world is keenly watching the Chinese authorities' 2023 gross domestic product (GDP) target.

The South China Morning Post (SCMP) cited recent remarks by Han Wenshu, Deputy Director of the Central Financial and Economic Affairs Commission Office, reporting that China will continuously ensure reasonable growth. Han, newly elected as a central committee member at the Party Congress, is known to be taking a key position at the National Development and Reform Commission (NDRC).

SCMP reported that Han said economic growth, including GDP, will continue to be emphasized in 2023, the first year of Xi's third term in power.

He explained the Chinese leadership's stance of expanding the pie by saying, "For all people to live above a certain standard, growth must be maintained within a reasonable range for a considerable period." Han's remarks imply that growth will not be sacrificed to reduce the wealth gap. He said, "The economy should not experience rapid growth or decline," and mentioned the need to review current Chinese policies on consumption, real estate, private investment, U.S. technology restrictions, and COVID-19 prevention policies.

The Shanghai Securities News explained that these remarks reflect considerations for both qualitative and quantitative development of China's economy. The analysis is that qualitative improvement in economic development will provide continuous momentum for quantitative growth.

SCMP also interpreted his remarks as reflecting the Chinese leadership's view that the past development model, which caused environmental destruction due to massive capital input, can no longer be sustained.

[Image source=Yonhap News]

Interest is inevitably rising over the extent to which the Chinese leadership will set next year's economic growth target. Achieving this year's Chinese economic growth target is already out of reach. This year's target was "around 5.5%." After recording 4.8% in the first quarter, China’s economy grew by only 0.4% in the second quarter and 3.9% in the third quarter. The dominant forecast is that the annual growth rate will remain in the 3% range.

The outlook for next year is also not bright. Major overseas economic forecasting institutions are showing a pessimistic response, lowering their forecasts for China's economic growth rate to the 4% range next year.

Some voices suggest that, as in 2020 during the COVID-19 pandemic, the Chinese leadership may not announce an economic growth target for 2023. Given the complexity of domestic and international issues such as intensified U.S.-China conflicts, prolonged Russian invasion of Ukraine, unpredictable international energy prices including oil, instability in international raw material and food prices, and COVID-19 resurgence, setting a target may not be easy.

There is also a persuasive analysis that the political burden on President Xi if the economic growth target is missed for two consecutive years will be taken into account. Ambiguous phrases such as "reasonable growth," "past development model no longer sustainable," and "qualitative development" have begun to appear.

This content was produced with the assistance of AI translation services.