Lower growth target shows new economic priorities
- By Yi Xianrong
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E-mail People's Daily, March 10, 2016
The lower GDP target could also release some of the pressure from the problems that have accumulated over a long period. For instance, topics relating to dealing with overcapacity, allowing zombie enterprises to go bankrupt, improving the efficiency of resource usage, reducing pollution, and cutting over-dependence on real estate through industrial restructuring have all been reflected in this year's government work report.
The excessive pursuit of rapid economic growth and overreliance on the property industry in the past have distorted the market and certain government functions, leading to unreasonable income distribution, lower support for disadvantaged businesses and groups, slow reform in the financial market, and less-than-expected progress in implementing certain policies that could benefit the Chinese people.
Setting the growth target in a range of 6.5 to 7 percent can allow the government to increase the fiscal deficit and continue with structural tax cuts, thus making it possible to rectify these distortions. For example, the government can focus on investment in irrigation, development of shantytowns and dilapidated houses in urban and rural areas and building railways and roads in the country's central and western regions, as well as reducing the tax burden on firms to bolster the economy.
More importantly, the target will allow China's economic growth to be further driven by consumption and innovation, rather than depending heavily on traditional growth drivers like exports, investment and real estate, and providing new momentum for China's continued economic development. It will certainly have a far-reaching impact on China's economy and policy in the future.
The author is a columnist with China.org.cn. For more information please visit:
http://china.org.cn/opinion/yixianrong.htm
Opinion articles reflect the views of their authors, not necessarily those of China.org.cn.
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