The government work report delivered by Premier Li Keqiang on March 5 not only shows satisfactory economic and social achievements of the past five years, but also draws a blueprint for China’s future development, said Li Daokui, an economics professor at Tsinghua University and member of this year’s National Committee of the Chinese People’s Political Consultative Conference.
The report said that by 2020, China’s gross domestic product is expected to reach 90 trillion yuan, and it also described an action plan for this year, said the economist.
The Premier said in the government work report that this year’s growth target is set between 6.5 and 7 percent.
According to Li Daokui, the first reason the goal is in a range rather than one single number is that China’s current economy is influenced by many uncertainties, including from overseas; the second reason is to give the local governments a flexible goal to set their economic growth targets according to their own conditions.
The base line of the growth target is 6.5 percent, which is aligned with the country’s growth goal during the 13th Five-Year Plan (2016-2020), and it is not hard to achieve, said Li.
He also said although China increased its fiscal deficit ratio from 2.3 percent last year to 3 percent this year, the number is still relatively low compared to other countries. He also said the number is at a very safe level.
As the Chinese central government holds a large number of assets, which is very different from governments in other countries, it can issue more bonds, increasing the deficit ratio, and that is very reasonable, said the economist.
The Premier first mentioned the “new economy” in the government work report this year, and as the economist says, the term means new industries and new business models.
The new economy can bring about employment opportunities, more taxes and economic activities, forming a foundation for the country to cut overcapacity and reduce debt.
Li said he has confidence in China’s cutting overcapacity and deleverage plan, as the country’s employment, banking and fiscal situation are all well-prepared.