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As China Ditches High Growth, the World Must Adjust

3 1 2
04.05.2021

When China’s political elite met in early March for the annual National People’s Congress (NPC), we heard a lot about President Xi Jinping’s ambitious plans to make China a leader in innovation, clean technology, and global influence. But one subject was far less prominent: targets for economic growth. The implicit theme of the NPC this year was that the era of Beijing chasing high growth is officially over, by design and by circumstance.

This is a message that the outside world needs to internalize. Investors and policymakers who have long relied on a high-revving Chinese economic engine need to have realistic expectations about future growth rates. Moreover, lest they be caught flat-footed by shifts in policy, these observers need to be more attuned to Beijing’s signaling on the economy as officials jettison the rigid GDP targets that have long served to anchor expectations.

Xi has been gradually pivoting away from Beijing’s long focus on high growth, but this year is ready to make the shift more explicit in terms of both ideology and operational goals. In a January speech, Xi announced that 2021 marks a “new development stage” for China. Under Mao Zedong, China “stood up”; under Deng Xiaoping, China began the process of “getting rich”; Xi is now ready to lead China on its next leap, to “becoming strong.” As part of the justification for moving on from the focus on “getting rich,” Xi is declaring mission........

© The Diplomat


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