China Research

This year’s National People’s Congress (NPC) has come to an end – without revealing any major surprises. China’s political leaders stressed that a lot of work has to be done in the forthcoming years. However, the economy is regarded as resilient, moving forward and still able to achieve a GDP-growth rate of at least 6.5 percent on average until 2020 (if we apply official GDP calculations in this context). This growth rate should be good enough – expressed in quite a humble way – “to push China to a moderately prosperous society”, according to the leadership of the Communist Party.

Institutional improvements, innovation and more supply-side policy were also singled out with emphasis at the Congress. But I could not find any deepening details about the reform results so far related to the ambitious program from the Third Plenum in November 2013 (evaluation in 2020). This is certainly a shortcoming if my observation is correct. Actually, I could not find any interesting examples of improved transparency.

One detail was striking me all the same: the acceptance of a higher budget deficit in 2016 (3 percent at the most compared to 2.3 percent in 2015). This was the message in the Chinese and international press. But I did not read any line about the fact that this number was aiming at the central government debt only – thus, excluding the much higher local debt ratio. One more example of insufficient transparency!

Hubert Fromlet
Senior Professor of International Economics, Linnaeus University
Editorial board

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