Editor’s Note: China’s annual legislative and political consultative sessions – more commonly known as the “two sessions” – are set to kick off on Tuesday. With a variety of issues set for debate during the two sessions, those revolving around the Chinese economy will surely be among the hottest topics. The Global Times has put together a rough outline of two most-talked about subjects about the economy, as a guide to the forthcoming discussions at the sessions.
A focus on growth targets
Having missed its official growth target of 7.5 percent in 2014, for the first time since 1998, the Chinese economy started the year on a weak note, with a slew of economic indicators for the first two months suggesting sustained downward pressure on the economy.
Now all the eyes are on the disclosure of the 2015 GDP growth target, which will be made available in Premier Li Keqiang‘s government work report to be delivered at the opening of the National People’s Congress (NPC) session on Thursday.
It is widely believed that the official growth target for 2015 will be set at below 7.5 percent, although predictions vary as to the extent.
Representing the majority view of market watchers, Xu Hongcai, director of the Department of Information under the China Center for International Economic Exchanges (CCIEE), a Beijing-based think tank, told the Global Times on Monday that the GDP growth target is likely to come in at between 7.1 percent and 7.2 percent.
“That would still be a satisfactory growth figure,” he said, noting that an annual GDP growth rate of below 7 percent is unlikely.
The State Information Center, a government think tank, estimated in a report that China’s economy would grow 7 percent in the first quarter of 2015, the Xinhua News Agency reported on Monday.
Private entrepreneurs also dismiss excessive fears of a cooling economy amid a “new normal” of slower, yet higher quality growth.
“The increase in China’s economic size, which is already quite large, is set to naturally moderate, which should not be of great concern,” Zong Qinghou, a beverage mogul and an NPC deputy, told the Global Times on Monday.
Remarking that the recovery of the world economy hinges on China’s economic growth, Zong, founder and chairman of Chinese drinks behemoth Hangzhou Wahaha Group, said China needs to focus on boosting domestic demand, which would help the economy regain steam.
A flurry of reform measures pushed by the current leadership have provided more room for revitalizing the economy, he noted.
‘One Belt and One Road’
While China’s economy faces downturn pressures, the “One Belt and One Road” initiative is expected to bring new growth opportunities, experts have said.
Chinese President Xi Jinping laid out the vision for the initiative during his visits to Central Asia and Southeast Asia in 2013. The “One Belt and One Road” term refers to efforts to build a Silk Road Economic Belt and a 21st Century Maritime Silk Road.
The Belt will link China with Europe through Central and Western Asia, while the Road will connect China with Southeast Asian countries, Africa and Europe. Together the two will draw the regions involved into a global partnership.
However, the initiative has been misunderstood by some foreign scholars and media reports as the Chinese version of the Marshall Plan, a US-sponsored assistance program that helped reset the European economy after World War II.
Lü Xinhua, spokesman for the ongoing Third Plenary Session of the 12th National Committee of the Chinese People’s Political Consultative Conference, told a news conference on Monday that it is inappropriate to describe the initiative as another Marshall Plan.
“The Marshall Plan, which occurred against a specific historical background, had political purposes with many conditions attached; the ‘One Belt and One Road’ initiative, however, pursues common development of countries with different ethnicities, religions and cultures,” Lü told a press conference on Monday.
Xu from CCIEE expected that more specific details would be unveiled on the “One Belt and One Road” initiative following the two sessions.
President Xi also announced in November 2014 the creation of a $40 billion Silk Road Fund to support the development of the “One Belt and One Road” initiative.
The fund, which is designed to improve trade and transport links in Asia, is now active and will seek investment opportunities and provide monetary services through the Belt and Road initiative, China’s central bank said on February 23.
To connect these areas requires infrastructure construction, including railways, which will stimulate China’s economy and create new jobs, according to Xu.
Together with China’s ongoing urbanization and plans to expand free trade zones, the “One Belt and One Road” initiative can help China’s industrial restructuring and create economic growth, Xu noted.
(The Daily Mail – Global Times news exchange item)
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