China should lower next year’s economic growth target to 6-6.5% as headwinds including a trade dispute with the US increases risks for the economy, according to government advisers’ recommendations.
The country’s top leaders will meet to map out the 2019 economic agenda at this week’s annual Central Economic Work Conference, a closed-door gathering of party leaders and policymakers.
The event will be closely watched by investors for any fresh policy steps to ward off a sharper slowdown in the world’s second-largest economy.
The conference is likely to convene tomorrow, two policy insiders said, a day after an event marking the 40th anniversary of China’s reform and opening up, where President Xi Jinping is due to make what the official Xinhua news agency described as an “important” speech.
The meeting will not result in any public announcement of economic targets, which are usually reserved for the opening of the parliamentary session in early March.
China’s trade war with the US is spurring some Chinese entrepreneurs, government advisers and think-tanks to call for faster economic reforms and the freeing up of a private sector stifled by state controls.
Government advisers and think-tanks, which are influential but aren’t empowered to execute policies, have recommended a growth target of 6-6.5% for 2019, versus around 6.5% in 2018.
“Next year’s growth target could be 6-6.5% as the economy is likely to slow from this year,” a policy insider who advises the government said on condition of anonymity.
The Chinese Academy of Social Science, a top government think-tank, has forecast growth to slow to 6.3% in 2019 — which would be the weakest since 1990 — from an estimated 6.6% in 2018.
Some advisers suggested the government should be more tolerant of weaker growth, pushing reforms and avoiding strong policy stimulus that could worsen the country’s debt problems.
Still, a growth rate of 6% for next year is seen as the bottom line, amid concerns about employment due to pressures on the economy both domestically and on the external front.
“The economy is expected to slow next year, but the situation won’t be very serious if we can manage it well, because room for expanding domestic demand is relatively big,” said one adviser.