China's latest GDP target 'attainable'

OECD chief says average annual growth of 6.5% achievable as country's reforms start to kick in

The Chinese government's target of maintaining a "sustainable" range of 6 to 7 percent in annual GDP growth is achievable in the coming five years as the country implements structural reforms, according to Angel Gurria, chief of the Paris-based Organization for Economic Cooperation and Development.

"I think the country's economy will be sustained in the range decided by the government," Gurria told China Daily during an exclusive interview on March 17 at the OECD headquarters.

"Right now for China this growth rate, in my opinion, is much better than a two-digit number, which can easily cause bubbles."

China's top legislators approved the national 13th Five-Year Plan (2016-20) at their recent annual gathering. The growth target is a minimum of 6.5 percent on an average basis annually.

Before bouncing back, Gurria says, China's economy will drop to 6.5 percent growth in 2016 from last year's 6.9 percent. The forecast for 2017 stands at 6.2 percent.

But he suggests that China should not pay too much attention to short-term downturns, which the market easily reacts to, but concentrate on whether the economy is on track or not.

"We maintain this forecast mainly because of the world economic situation and China's ongoing gear-changing process of structural reform," Gurria says.

In its November economic outlook report, his organization forecast that the world economy would grow at 2.8 percent and 3.3 percent respectively in 2016 and 2017. But due to slowing growth in both emerging and advanced economies and low prices that depressed the economies of commodity exporters, the OECD last month revised the forecast downward to 2.5 percent and 3.1 percent respectively.

But the OECD has not revised the China forecast in its February report. "We did not revise down China's forecasts this time, though globally the downward pressures are gathering," Gurria says.

At the same time, he says the potential in implementing China's economic structural reform will also need time to take effect before the economy bounces back.

China's relaxation of its family planning policy, household registration system and further efforts to lift people out of poverty are all useful tools to speed up economic growth, but their impact also needs time to become visible, he says.

China's determination to upgrade its growth quality and improve its businesses' position in the global economic chain, as well as improving the added value of its economy, are viable in the next five years, Gurria says.

China will be encountering new challenges, and solutions are not so simple, he says.

"China is experiencing a complicated transition. I think it is normal that there exist ups and downs and fluctuations. And the focus of macroeconomic control should be whether the economy is on track or not."

Gurria says his organization will be working with the Chinese government on many global economic topics to prepare for the G20 summit, which is scheduled in early September in Hangzhou, Zhejiang province. China will chair the summit.

Asked about China beinggiven market economy status club, he says: "We are ready and it is up to China's decision." Gurria's organization backed China for market status 10 years ago.

Contact the writers through fujing@chinadaily.com.cn

(China Daily European Weekly 03/25/2016 page28)