China’s Growth Targets Need to End
資本與市場
作者：Jeffrey Friedland
It’s no easy task for China’s leadership to govern a country of 1.4 billion. It’s a burden that no leader of any other advanced economy faces.
Included in Beijing’s overall challenges are its domestic and economic policies， both of which are intertwined. Sufficient growth must be maintained when a key objective of the Communist Party and Beijing’s leadership is maintaining social order and delivering for the country’s population a better quality of life. For much of China’s population a better quality of life translates today to a good job and increasing income. Longer-term it includes a better environment including reduced pollution.
It’s difficult for many in the western world to understand Beijing’s pressure to create more than 10 million new urban jobs annually. Last year， Beijing succeeded and 13 million new urban jobs were created， which I view as a great economic success despite a year of lower GDP growth. To put this monumental task in perspective， the United States only needs to create 1.3 million new jobs annually.
All aspects of continuing to evolve China’s economy from one that is centrally planned to a market economy with Chinese characteristics is continuing to be a major challenge for Beijing.
The headwinds that China’s economy faces are many. Most of us like to think that Beijing’s leadership has significant control over its own economic destiny. To a large extent this is wishful thinking， not based on what China’s leadership is able to impact， but more importantly given on what its leadership is unable to impact. Premier Li Keqiang has stated that China has more economic tools available if the “new normal” of reduced growth impacts job growth and income， but Beijing can’t impact foreign demand for China’s manufactured goods.
It’s clear that China’s three decades of growth in excess of 10 percent are long gone. Logical thinking results in the conclusion that China’s economy couldn’t continue to grow at the above 10 percent rate indefinitely， but many of us believed or wanted to believe that the economy would.
This becomes even more clear when one understands the basic “law of large numbers，” which applies not only to companies， but also to nations. Specifically， the larger an economy grows， the harder it becomes to keep growing at that same rate. For example， if China’s economy grows at 7 percent in 2015， it is actually generating more additional economic output than its economy did in 2007 when China’s growth rate was 14 percent. If you think about it， it’s easy to comprehend. But if most of China’s population are fixated on growth of less than 10 percent as being unacceptable， it’s a challenge for the leadership in Beijing to convince them otherwise.
China’s 7 percent growth target for 2015， which was confirmed when the National People’s Congress met in March， should have been viewed internationally as a very positive announcement. But it wasn’t. Instead the news was generally reported in the context of comparing the 7 percent target to the years of growth in excess of 10 percent. For the most part， the global media reported the 7 percent growth target as a failure， and viewed the reduced growth target as evidence that there was something structurally wrong with China’s economy.