Third-quarter growth of 6.9 per cent marked China’s weakest expansion since the global financial crisis.
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President Xi Jinping has affirmed China’s goal to achieve moderate prosperity by 2020 through steady economic growth, according to a report by China Daily.
The party said it will switch to a “negative list” in foreign exchange regulation during the five-year plan, which would allow companies to do whatever is not explicitly prohibited.
The agency described the 6.5% figure as “China’s bottom line” for the period. For the first time, the country’s head has announced annual target growth rate below 7% for the current year.
China’s 13th Five-Year Plan, the proposal for the country’s development over the next five years, will bring new opportunities for domestic economic growth, overseas experts have said.
Botched stock market interventions and a sudden currency devaluation have rattled confidence in the country’s leadership, which has staked its legitimacy on maintaining an aura of economic infallibility.
The meeting of the Chinese Communist party’s powerful central committee – known as the “Fifth Plenum” – aimed to complete the details for China’s upcoming five-year plan, the roadmap for the country’s economy until 2020.
The official, however, added, “Of course, speed is not the only thing we care about”.
The plan vowed to narrow the income gap and deepen household registration reforms so more rural residents can live and work in Chinese cities.
It seems extremely hard for Beijing to achieve GDP growth rate of 7% or above in coming years owing to the lack of momentum in the economy at the year-end.
Li has instead emphasised the importance of indicators such as job creation, a key factor in supporting consumer confidence.
The official PMI released by the National Bureau of Statistics is weighted toward China’s larger, state owned enterprises while the Caixin survey is geared to smaller, private enterprises in China’s manufacturing industry, which employs tens of millions. This means lower percentage rates of economic growth (although rates still high in global terms) coupled with structural economic reform.
The proposal also called for making China’s currency, the yuan, “freely convertible and usable” over the next five years, setting a new timetable for the long-promised and delayed capital account convertibility-whereby money can move freely across borders-in an orderly manner.
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The Chinese government has set its sights on securing a place for the yuan in the Special Drawing Rights basket alongside the USA dollar, the euro, the British pound and Japanese yen as part of its goal of raising the worldwide profile of the currency.
