China is hosting the annual BRICS summit virtually this year. Pictured is Chinese President Xi Jinping speaking via video at the United Nations General Assembly in New York, United States, Tuesday, September 21, 2021.
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BEIJING — Chinese President Xi Jinping made a rare statement Wednesday about his country’s goals to meet its economic goals for the year.
Investment analysts have lowered their Chinese GDP growth forecasts well below the official target after strict Covid controls restricted business activity in recent months. Government stimulus has been relatively muted so far.
“We will accelerate macroeconomic policy adjustment and adopt stronger measures to achieve year-round economic and social development goals and minimize the impact of COVID-19,” Xi said on Wednesday, according to a reading of state media in English.
He did not give details on the type of measures that would be used to support growth. Rather than “more forceful,” the Chinese text of the speech released by state media described the upcoming measures as “more effective,” according to a CNBC translation.
However, Xi’s unusually blunt language marks a rare public mention by a senior leader of full-year economic targets since they were set at an annual meeting in mid-March.
These goals include unemployment in cities of “no more than 5.5%”, an increase in the consumer price index “of about 3%” and GDP growth “of about 5.5% “.
The median GDP forecast among investment banks tracked by CNBC is much lower, at 3.4%.
Bank of America became the latest to cut earlier this week, while Nomura has the lowest forecast of 3.3%. Goldman Sachs is the only major investment bank with a forecast of 4% or slightly higher.
“While the recovery in growth appears to have accelerated in June, barring further dramatic policy easing, we believe that the GDP growth target of around 5.5% remains extremely challenging. this year,” Goldman Sachs analyst Maggie Wei and a team said in a note Wednesday.
In May, Premier Li Keqiang called on officials in an unprecedentedly large videoconference to “work hard” for growth in the second quarter. Economic figures for April and May indicated the slowest growth since the initial shock of the pandemic in early 2020.
Xi was addressing the opening ceremony of the BRICS – Brazil, Russia, India, China and South Africa business forum on Wednesday. China is hosting the annual gathering of developing countries virtually this year.
During his speech, Xi said China has coordinated both Covid control and economic development, and will protect people’s lives and stabilize the economy as much as possible.
Xi said the 20th Chinese National Party Congress in the second half of this year “will chart the course for the next phase of China’s development.” He added that China will continue to open up its economy and welcome foreign investment.
The ruling Chinese Communist Party shuffles its top leadership at National Congress meetings every five years. Xi is expected to remain president in an unprecedented third term.
Boost car sales
Separately on Wednesday, Premier Li led a meeting of the State Council – the top executive body – which stressed the importance of consumption in driving economic growth.
The meeting called in particular for measures to support auto sales and estimated 200 billion yuan ($29.85 billion) in auto-related sales this year.
That’s about 0.5% of China’s total retail sales in 2021, according to Goldman Sachs.
Correction: This story has been updated to reflect that Bank of America was the last bank to cut its China GDP forecast. A previous version did not take this reduction into account.