China May Average 5% Growth Through 2025: Advisor

China has the potential to set and achieve average annual growth of about 5% for the next five years after reaching 2-3% this year, although targets for 2021-2022 may be suspended to adjust for the skewing caused by the pandemic this year, Li Xuesong, a senior policy advisor told reporters Friday.

With that pace of development, China is poised to become a high-income country in 2025 when its 14th Five-Year Plan ends. Through the next 10 years, per capita GDP could rise further to USD23,500, said Li, a deputy director of Institute of Industrial Economics of the Chinese Academy of Social Sciences (CASS), at a State Council Information Office briefing.

However, consumption-powered growth may slow if issues such as the income gap and high leverage are not addressed, Li said. China's major trading partners may also be stuck in a period of low growth after 2021, curbing domestic markets, Li said.

REFORM

China will enhance structural reform guided by the dual circulation strategy in the next five years while managing pro and anti-globalization forces and domestic challenges, including an aging population, said Cai Fang, the deputy-director of the CASS. Aging will erode growth, pressure pension systems, reduce capital returns and stress social stability, he said.

China will continue to relax birth control measures, reduce childcare costs and reform the pension system, Cai said. China's over-65 population has reached 1.76 billion, 23% of the world total, even as its overall population accounts for just 18.2%, and the disparity will persist, Cai said.

China will further strengthen security and safety, said CASS member Zhang Yanchun, a specialist on global affairs. There may be risks to a dollar-led world economic order as the U.S. economy is losing its dominance while its debt rises, he said.

Still, China is better positioned to link to other economies, helped by the Regional Comprehensive Economic Partnership, Zhang said. China also intends to join the CPTPP. However, certain challenging areas, including the reform of state-owned enterprises, will take some years to negotiate, Zhang told MNI separately following the briefing.