China has restored its annual economic growth target, setting it at above 6% for 2021 and promising to create more jobs in cities than last year, as the world’s second-biggest economy emerges from a Covid-hit 2020.
China dropped its gross domestic product growth target in the Premier’s work report for the first time since 2002 after the pandemic devastated its economy in late January and February.
But with the recovery from the slump 2021 is a different story.
“As a general target, China’s growth rate has been set at over 6% for this year,” Premier Li Keqiang said in his 2021 work report. “In setting this target, we have taken into account the recovery of economic activity.”
China’s GDP expanded 2.3% last year, the only major economy to see growth but the 6% growth target this year is no more than the actual outcome for 2019, which was the last pre-Covid year.
Premier Li said in his report (for the People’s Congress this week) that China will target creation of more than 11 million new urban jobs, Li said in his report delivered at the opening of this year’s meeting of parliament. That’s up from a goal of over 9 million new urban jobs last year, and in line with recent years.
The government is targeting a 2021 budget deficit of around 3.2% of GDP, less than the 3.6% plus target for 2020 (which was more of an aspiration rather than a hard and fast target).
After a solid start in January, China’s economy slowed a little in February. This week’s manufacturing and service sector activity surveys show a marked slide.
China’s factory activity expanded at the weakest pace in 9 months in February as weak overseas demand and coronavirus flare-ups hit demand and demand.
The official survey showed the slowest rate of expansion from last May, as did the private survey from Caixin Magazine.
The official manufacturing survey index fell to 50.6 from 51.3 in January, data from the National Bureau of Statistics (NBS) showed but remained above the 50-point mark that separates growth from contraction.
February also saw the Lunar New Year holidays, when many workers usually return to their hometowns, but for the second year in a row this saw far fewer trips amid renewed Covid fears.
The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) fell to 50.9 last month, the lowest level since last May.
The Caixin/Markit services survey index fell to 51.5, the lowest since April, from 52.0 in January but remained above the 50-mark that separates growth from contraction on a monthly basis.