In the most unambiguous signal yet of a slowdown in China’s economy, President Xi Jinping today ordered officials to ensure that the GDP does not slip below 6.5 per cent, putting for the first time a minimum target for the world’s 2nd-largest economy to be “moderately prosperous.”
China’s annual growth should be no less than 6.5 per cent in the next five years to realise the goal of doubling GDP and per capita income by 2020, Xi was quoted as saying by the state-run Xinhua news agency explaining a proposal for formulating China’s 13th Five-Year Plan at law week’s plenary meeting of the ruling Communist Party of China (CPC).
This is the first time that the Chinese leadership came out with a minimum benchmark as the economy in third quarter slipped below 7 per cent since the 2009 global meltdown causing uncertainty about the future course of the economy.
To realise the goal of doubling the 2010 GDP and per capita income of both rural and urban residents, China must maintain medium-high growth for the next five years.
“Maintaining a medium-high level of growth is conducive to improving people’s livelihoods so that they can truly benefit from the success of the country in comprehensively building a moderately prosperous society,” Xi said.
“In the next five years, China’s development should not just be focused on growth pace, but also growth volume, and, more importantly, growth quality,” said Xi, also the general secretary of the CPC.
China’s gross domestic product (GDP) per capita meanwhile has increased to about USD 7,800 registering over USD 800 compared to 2013, said the document of the 13th five plan which starts from next year.
It was approved during plenary body of the ruling Communist Party of China (CPC) last week.
During the current plan from 2011-2015 period, the value added of tertiary industry surpassed secondary industry for the first time as urban residents account for 55 per cent of the total population changing China’s charter from rural agricultural economy to that of an industrial.
During this period, China’s USD 10 trillion economy became the second-largest surpassing Japan.
About the growing rich-poor divide, the 13th plan document said the income distribution system will be adjusted to narrow the income gap in the next five years.
China aims to “significantly” increase the wages of the low-income population, and increase the proportion of middle-income group, it said.
A more comprehensive income tax system will be accelerated and “grey” income, money obtained from unclear sources, should be regulated, it said.