(Yicai Global) March 2 -- China may refrain from setting an economic growth target for a second year in a row as the annual meetings of the national legislature and top political advisory body begin this week, according to experts.

China could again omit setting a GDP growth target because of the distortion in any reading due to last year’s low base amid the coronavirus pandemic, said Ming Ming, deputy director of Citic Securities Research Institute. Economic growth is expected to be about 8 percent this year, he added.

In its latest World Economic Outlook published in January, the International Monetary Fund projected the country’s GDP to gain 8.1 percent in the 12 months through December. As the IMF expected, China was the only major economy to grow last year, expanding 2.3 percent.

Ming also noted that in recent years the Chinese government’s work reports have used more flexible language such as ‘around’ and ‘between’ in relation to economic goals, showing that the authorities are trying to avoid excessive emphasis on growth targeting.

Policy Direction

The other key economic issues of interest at the so-called two sessions, or lianghui, is how the nation’s monetary and fiscal policy will proceed.

Regardless of economic growth, inflation and employment, monetary policy will remain stable overall, and the focus will still be on increasing structural support, Wen Bin, chief researcher at China Minsheng Bank, told Yicai Global.

“Medium, small and micro enterprises are still facing operating difficulties,” Wen said. “Regarding credit policy, the support for key fields and weak links -- including manufacturing, small and micro, innovation and environmental protection -- will continue.”

It would not be appropriate to tighten monetary policy, at least in the first half of this year, Sheng Songcheng, former counselor of the People's Bank of China and former director of the Survey and Statistics Department at the PBOC, said at the China Wealth Management 50 Forum yesterday.

Tax Cuts

There will be some reduction of taxes and fees this year, taking the needs of enterprises into account, Finance Minister Liu Kun said in a media interview earlier this year.

China cut taxes and fees by CNY7.6 trillion (USD1.2 trillion) during the 13th Five-Year Plan period from 2015 to 2020. Taxes and fees were cut by CNY2.5 trillion last year to counter the impact of Covid-19.

The scale of tax and fee cuts this year will not be as large as in 2020, but it is still expected to be at least CNY1 trillion, in view of fiscal sustainability and the current economic situation, said Shi Zhengwen at the China University of Political Science and Law.

The fourth session of the 13th National Committee of the Chinese People's Political Consultative Conference, China’s top political advisory body, is scheduled to open in Beijing on March 4, and the fourth session of the 13th National People's Congress, China’s top legislature, will begin on March 5.

Editor: Tom Litting