China's economy to top ¥140 trillion this year, says state planner
The size of China's economy will exceed 140 trillion yuan ($19.5 trillion) this year, the head of the state planner said as policymakers look to steer the country beyond the current five-year policy plan, which concludes at the end of 2025.
The world's second-largest economy is grappling with a prolonged trade war with the United States and persistent deflationary pressures.
'Looking back at the 14th five-year plan period, the challenges encountered were greater than expected, but the achievements exceeded expectations,' Zheng Shanjie, chair of the National Development and Reform Commission, said at a press conference.
Zheng highlighted progress made under the 2021–2025 five-year plan, which focuses on key priorities such as economic development, technological innovation, green transformation and improvements in people's livelihoods.
In its 14th five-year plan released in 2021, China dropped a specific gross domestic product growth target for 2021–2025, but has continued to set annual growth targets during the plan period, with the goal for 2025 set at around 5 percent.
The economy grew at an average annual pace of 5.4 percent from 2021 to 2024, despite the impact of COVID-19, official data showed.
Zheng said China has built the world's largest and most comprehensive manufacturing sector, strengthening its industrial and supply chains and boosting confidence in the country's ability to handle various risks and challenges.
Foreign technology curbs would only strengthen China's self-reliance and its capacity to be innovative, Zheng added.
Officials at the briefing offered no details on the 15th five-year plan, as Chinese leaders are still gathering proposals for the blueprint, which will outline national priorities through 2030.Chinese government advisers are stepping up calls to make the household sector's contribution to broader economic growth a top priority at Beijing's upcoming five-year policy plan, as trade tensions and deflation threaten the outlook.
Consumer prices in China rose slightly in June, official data showed on Wednesday, snapping a four-month decline even as factory gate prices were bruised by a fierce trade war with Washington.
Chinese officials have been trying to revive sluggish domestic spending since the end of the COVID-19 pandemic, with the government's official growth target at risk.
That comes just as leaders face heightened turmoil sparked by US President Donald Trump's trade war.
The consumer price index — a key measure of inflation — edged up 0.1 percent on-year last month, according to data published by China's National Bureau of Statistics (NBS).
The reading beat the 0.1 percent drop forecast in a Bloomberg survey of economists and was an improvement on the 0.1 percent fall seen in May.
The flip into positive territory was 'mainly due to the rebound in prices of industrial consumer goods', NBS statistician Dong Lijuan said in a statement. Dong noted that 'policies of expanding domestic demand and promoting consumption continued to be effective'.Beijing has set its official growth target this year at around five percent, although many economists consider that goal to be ambitious because domestic spending remains sluggish.
The government has introduced a series of aggressive moves since last year in an attempt to get people spending, including key rate cuts, abolishing some restrictions on homebuying and a consumer goods trade-in scheme.
In a signal of further deflationary pressure, Chinese factory gate prices fell in June at the fastest rate in nearly two years, the NBS also said on Wednesday.
The producer price index declined 3.6 percent year-on-year, accelerating from a 3.3 percent drop in May, and faster than the 3.2 percent decline estimated in the Bloomberg survey.'I think it is too early to call the end of deflation at this stage,' Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, wrote in a note.
China's once-booming real estate market has been mired in a crisis for years, stalling many large construction projects and spooking would-be homebuyers. 'The momentum in the property sector is still weakening,' Zhang said.
The slump in the property market — long a key driver of growth — gives China's exports a more prominent role in boosting economic activity.
However, the outlook for Chinese exports has also darkened with fierce headwinds on trade this year.
Trump revealed new tariff rates for many countries this week, with many at levels similar to those announced — and later paused — in April.
Zhang said 'the market is too complacent about the damage of such high tariffs on both the US and the global economy'.
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