Arab Today, arab today china softens gdp target to toughen reform
Last Updated : GMT 04:44:18
Arab Today, arab today
Arab Today, arab today

China softens GDP target to toughen reform

Arab Today, arab today

Arab Today, arab today China softens GDP target to toughen reform

China softens GDP target to toughen reform
Beijing - Xinhua

The soft overcomes the hard, the gentle overcomes the rigid," said Chinese philosopher Lao Tzu about 2,500 years ago. China's top leaders have taken the ancient wisdom to heart in the battle against economic headwinds.

By setting the GDP  growth target in 2016 at a range from 6.5 to 7 percent instead of a specific figure, the Chinese government has applied more flexibility in economic management, making room for structural reform to realize long-term growth.

It is the first time China has offered an annual growth target range in two decades, and the change itself is remarkable. For the past three decades, the Chinese economy has enjoyed enviable rapid growth, and the pace of which often surpassed official GDP targets.

No countries could sustain such fast growth forever, especially for an economy as large and complicated as China's. Obsession with a high GDP growth target could delay the inevitable transition to a more sustainable model.

By setting a flexible GDP target, the central government has sent a strong signal to local officials that the figure alone is not what they should strive to seek. To steer the economy onto a more sustainable path, a more dynamic evaluation system, including environmental standards for local governments, should be established.

That does not mean the target is no longer relevant, however. The floor of 6.5 percent is a guideline for the minimum rate of growth needed in the coming five years to meet the goal of doubling GDP and per capita income from 2010 to 2020.

The upper guide, at 7 percent, is slightly higher than the 6.9-percent growth rate achieved in 2015, and can boost confidence if successfully met.

Achieving the minimum 6.5 percent growth should not be hard for a country with ample policy tools. Interest rates are still high compared with those in many developed countries, suggesting room for more monetary stimulus if necessary. Fiscal policies have yet to play a greater role, with the deficit ratio ready to expand.

The savings rate remains high, suggesting potential for more consumption and investment. Income levels are climbing, giving rise to an emerging middle class with growing purchase power.

With a more flexible GDP target in mind, local governments can focus more on the arduous tasks they are facing. Empty houses could pose a risk to the pillar real estate sector, while industrial restructuring could bring unemployment rarely seen since the late 1990s, when reform of the country's state-owned enterprises left many jobless.

Re-employment of workers along with structural reform will be a major task for many local officials, as the central government has repeatedly claimed keeping the employment rate stable should be a priority.

Fortunately, with a much more developed social welfare system and economic foundation, the industrial ills can be addressed with fewer pains than the 1990s.

Flexibility also means the "invisible hand" can play a bigger role in resource allocation. The government should take the opportunity to further cut red tape and unleash vitality in the private sector, while letting innovation thrive without unnecessary intervention.

The Chinese economy has come to a point where reform is a must to sustain the country's long-term prosperity. By setting a flexible GDP target, the government has taken another step forward.

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today china softens gdp target to toughen reform Arab Today, arab today china softens gdp target to toughen reform

 



Arab Today, arab today
Arab Today, arab today Jordan airline suggests flyers 'talk'

GMT 11:59 2017 Friday ,24 March

Jordan airline suggests flyers 'talk'
Arab Today, arab today 5 Crafty Must-Have Limited-Budget Ideas

GMT 17:03 2017 Saturday ,25 March

5 Crafty Must-Have Limited-Budget Ideas
Arab Today, arab today Rebel supporters flood Yemen streets

GMT 06:39 2017 Monday ,27 March

Rebel supporters flood Yemen streets
View News in Arabic - Business: اقتصاد دولي
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Yemen children dream of school

GMT 07:25 2017 Friday ,24 March

Yemen children dream of school
Arab Today, arab today Trump to roll back Obama clean power plan

GMT 11:10 2017 Monday ,27 March

Trump to roll back Obama clean power plan
Arab Today, arab today Prepares to give stargazers an eyeful

GMT 13:38 2017 Monday ,06 March

Prepares to give stargazers an eyeful
Arab Today, arab today Uber grounds self-driving cars

GMT 09:11 2017 Monday ,27 March

Uber grounds self-driving cars
Arab Today, arab today Audi RS 5 Coupe acquires new design

GMT 13:22 2017 Thursday ,23 March

Audi RS 5 Coupe acquires new design
Arab Today, arab today Nermein Al Fekki films “Foxes in the Valley”

GMT 09:58 2017 Saturday ,25 March

Nermein Al Fekki films “Foxes in the Valley”
Arab Today, arab today Salvage of South Korea's Sewol ferry

GMT 04:51 2017 Friday ,24 March

Salvage of South Korea's Sewol ferry

GMT 06:21 2017 Friday ,24 March

MP submits a petition to dismiss university head

GMT 18:57 2017 Tuesday ,21 March

Accessories designer reveals her new collection

GMT 15:25 2017 Tuesday ,21 March

2017 already marked

GMT 13:26 2017 Friday ,24 February

Expresses Algerian history by woody figures

GMT 20:03 2017 Saturday ,25 March

Health expert warns from dust sensitivity

GMT 07:36 2017 Wednesday ,22 March

US, Britain ban laptops on flights

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons

GMT 19:27 2017 Saturday ,11 March

Boualsof launches "Priestess Kahina" collection
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday