China can accept GDP growth of less than 5%, says People’s Daily

3:12 am Wednesday, December 04th, 2024

BEIJING (Reuters) – China is not wedded to achieving specific GDP growth rates, and a pace of less than 5% for the economy is acceptable as there is no need for the “worship of speed”, state newspaper People’s Daily said on Wednesday.

In March, China’s government set a growth target of “around 5%” for this year, but the world’s second-biggest economy has struggled for momentum largely due to a prolonged property sector crisis and local government debt woes.

Beijing has responded with a series of stimulus measures since late September with only modest success so far. Economists say more policy support is needed to strengthen the recovery, and see U.S. President-elect Donald Trump’s tariff threat as a major growth impediment.

The focus for the Chinese economy is on qualitative improvements and reasonable quantitative growth, the newspaper of the governing Communist Party People’s Daily said in an editorial.

“If we do not break free from the ‘worship of speed’ and continue to expand blindly and launch projects indiscriminately, even if we temporarily boost growth, it will come at the cost of exhausting future growth potential,” the editorial said.

“After hard work, it is acceptable to be a little to the left or a little to the right of 5%,” it added.

The editorial also warned about the economic risks stemming from rising global economic instability and geopolitical uncertainties.

“Certain countries may escalate their containment and suppression efforts against us,” the editorial said in an apparent reference to Trump’s tariff threat and ongoing U.S. efforts to clamp down on Chinese tech and broader goods exports.

Signalling a difficult period ahead, the People’s Daily said that domestic consumption growth “is still weak, and it is increasingly difficult to stabilise investment,” adding that the economic recovery is not yet solid.

Reuters reported last month that government advisers were recommending that Beijing should maintain an economic growth target of around 5.0% for next year.

(Reporting by Ellen Zhang and Kevin Yao; Editing by Shri Navaratnam)