Setting China’s Growth Target Based on the Potential Growth Rate

Cai Fang 1 and Lu Yang 2

1 Chinese Academy of Social Sciences, Beijing, China
2 Institute of Population and Labor Economics of Chinese Academy of Social Sciences, Beijing, China

Abstract:  Different from other methodologies for the forecasting of China’s economic growth rate, this paper forecast of future potential growth rates from the end of China’s demographic dividends, and then identified it as a growth target. Official promulgation of non-binding targets will guide social expectation, assist in government policy-making, boost confidence in consumers, and provide guidance for producers and investors. Based on our estimation results, we suggest that during the 13th Five-Year Plan period, a GDP growth target between 6.5% and 7% would be appropriate.

Keywords: potential growth rate, growth target, demographic dividends, reform dividends

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