China premier says economy to surpass 170 trillion yuan in five years
The Asian nation is on track to achieve its real GDP growth goal of about 5% this year
[SHANGHAI] Chinese Premier Li Qiang suggested his country’s economy will maintain its current growth pace, touting China as an attractive market for global companies as Beijing seeks to mitigate concerns over its trade imbalances.
Li said that gross domestic product is expected to surpass 170 trillion yuan (S$31 trillion) in five years, implying an average annual growth rate of about 4 per cent to 2030 without adjusting for price changes. That’s in line with the nominal GDP growth reported so far this year.
The increase represents “new significant contributions to global growth”, Li told government and business leaders gathered at the annual China International Import Expo in Shanghai on Wednesday (Nov 5). He stressed that China would focus on “expanding domestic demand, especially on boosting consumption” to unleash the potential of the market.
While Li was not giving a precise target, the figure can be seen as a growth floor and reflects officials’ increasing focus on the quality of expansion, according to Michelle Lam, Greater China economist at Societe Generale.
“The number shows nominal GDP growth won’t go further down from here onwards,” she said. “At the end of the day, the priority is no longer about the quantity of real GDP. Escaping deflation is more important.”
Zhaopeng Xing, senior strategist at Australia & New Zealand Banking Group, said surpassing 170 trillion yuan could mean anything between 170 trillion yuan and 180 trillion yuan, which would represent a “reasonable” range of nominal GDP growth from 4 to 5 per cent annually.
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China is on track to achieve its real GDP growth goal of about 5 per cent this year, but nominal expansion has been slower due to falling prices. Persistent deflation is toxic for growth because it encourages consumers to delay purchases, increases debt burden and squeezes profit margins, risking a downward spiral of weaker spending and lower investment.
Breaking this cycle has become a top policy priority. Beijing has launched a so-called “anti-involution” campaign, an effort to stamp out the price wars that have plagued industries from electric vehicles to food delivery. By cracking down on excessive competition, officials look to help firms restore pricing power, rebuild margins and ultimately create capacity for the wage growth needed to spur consumption.
Regardless of spending power, China’s appeal as a consumer market depends on more than its overall growth pace. The European Union and the US have long complained about Chinese trade practices that prevent fair competition, and rising trade protectionism has disrupted the business environment.
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In a clear criticism of such trade barriers, Li said that “unilateral and protectionist measures have had a severe impact on the international economic and trade order”.
He added that China will work with other countries to promote stable and unimpeded global industrial and supply chains. Georgian Prime Minister Irakli Kobakhidze and Serbian Prime Minister Duro Macut were among those in the audience.
These tensions were alleviated somewhat last week after Beijing and Washington sealed a trade truce in South Korea. US President Donald Trump and China’s Xi Jinping agreed to reduce tariffs and roll back export controls in a landmark summit that stabilised relations after months of escalation.
The growing uncertainty abroad has also fed into China’s planning for the next half-decade, with Beijing last week pledging to “form an economic development model driven more by domestic demand and powered by consumption”.
The government plans to “significantly” boost consumption’s contribution to the economy and increase spending on public services and work on promoting employment, according to a readout laying out basic principles for the next five-year plan starting in 2026.
The new language signals growing resolve on the part of China’s policymakers to promote consumption among its 1.4 billion people, as countries around the world increasingly push back on its cheap goods flooding global markets. BLOOMBERG
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