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China’s abandoned illusion of high growth

By Zhang Jun

14 Apr 2023 · 4 min read

Editor's Note

Instead of chasing rapid growth rates at a time when the world economy is sputtering, China has changed tack, Zhang Jun writes in PS. Now it's focusing on job creation and macroeconomic stability.

SHANGHAI – After Chinese GDP grew by only 3% in 2022, one would have expected the government to set a growth target of at least 6% for this year. In fact, virtually no market forecast projects a lower rate. Yet, at last month’s National People’s Congress, outgoing Premier Li Keqiang revealed in his final Government Work Report that the government was aiming for growth of about 5%, the lowest target of his tenure.

Under former Premier Wen Jiabao, from 2003 to 2013, China maintained an official growth target of 8%. But, in his final Government Work Report, Wen lowered the target for the first time, by 0.5 percentage points. The reason was obvious: Wen wanted to help cool the then-overheated economy. Surprisingly, Wen’s successor, Li, effectively treated 7.5% as a ceiling for growth during his ten-year term.

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