Potential growth rate to hover at 7-8% from 2016-2020
Concerns have emerged over whether China's economic growth would be reflected in citizens' paychecks or would only widen the wealth gap, after a senior Chinese official said that the country's per capita GDP would reach $10,000 by 2020.
Vice Finance Minister Zhu Guangyao said at the NetEase Annual Economist Conference in Beijing on Saturday that China's GDP will reach 100 trillion yuan ($16.11 trillion) by 2020 as the country transforms itself into a well-off society.
Even a slower annual growth rate of about 6.8 percent in the next five years would allow the country to achieve its goal of doubling the 2010 economic level by 2020, Zhu said.
Net users said the $10,000 per capita GDP target has agitated them because they fear achieving the goal may further widen the wealth gap.
China's Gini coefficient, a gauge of economic inequality, has grown sharply over the past two decades, reaching 0.469 in 2014, according to the National Bureau of Statistics. The figure declined for the sixth consecutive year, but was still higher than the warning level of 0.4 based on international standards.
Considering China's per capita GDP in 2014 reached 46,531 yuan ($7,485), $10,000 is attainable, but the government still needs to make more effort to control the gap, said Yu Pingkang, chief macroeconomic analyst at Huatai Securities.
"Authorities should accelerate reforms in wealth redistribution, such as salary cuts among senior executives of State-owned enterprises and the reform of the country's pension system to allow society to equally enjoy the benefits of economic development," Yu said.
"China's potential economic growth rate will hover between 7 and 8 percent from 2016 to 2020, which not only reflects our confidence but is based on analysis," Zhu noted.
A potential growth range may form the basis of setting a target in the next five years, which is expected to be discussed at this year's annual meetings in Beidaihe, Hebei Province.
Ding Yifan, deputy director of the Institute of World Development at the Development Research Center of the State Council, said economic targets in five-year plans are usually at levels lower than the actual levels.
"For instance, the 11th Five-Year Plan (2006-10) set the annual GDP growth target of 7.5 percent and the 12th Five-Year Plan (2011-15) set it at 7 percent, but the actual growth rates during the period generally exceed the targets," Ding told the Global Times Sunday.
Yu said a relatively low growth target makes sense given that the country is undergoing a structural transformation and a series of economic reforms.
"If the central government sets a target of 6.5 percent, it may be designed to give the country more room for economic adjustment during the process of transformation and reform," Yu told the Global Times Sunday.
"And it doesn't necessarily mean the real growth rate should hit 6.5 percent once China accomplishes its reforms, because it is possible for economic growth to reach 7 percent or even higher," he said.
Looking forward to the next five years, China's vice finance minister said that improving the total factor productivity (TFP) is critical for economic development.
TFP, which measures how efficiently inputs are utilized in the economy, is an important factor which affects economic growth and is usually driven by advances in technology, Ding said.
"In this sense, technological innovation and use are key to improving TFP," he added.
Zhu also referred to a recent report from the International Monetary Fund (IMF), which shows that TFP growth in China is slowing, with annual growth rates falling from between 5 and 6 percent during the 2002-07 period to between 2 and 3 percent from 2008 to 2013.
In the report, the IMF also said that with China pushing forward with its reform and innovation agenda, the country's TFP will rise to between 4 and 5 percent in the next five years.