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China will focus on structural reform and boost domestic demand next year while growth will be easier to achieve given a low base of about 2% in 2020, senior officials said in an annual conference held by China Center for International Economic Exchanges on Saturday.
Han Wenxiu, deputy head of the Office of the Central Commission for Financial and Economic Affairs, told the conference that the economy would decline steeply quarter-on-quarter next year, with GDP growth averaging about 5% over the two years in line with the natural potential of the economy.
With less pressure to maintain growth, China should seize the rare opportunity to deepen supply-side reform and push innovation to prepare for higher-quality development, Han said. China's economy will aggregate CNY100 trillion this year, rising to 17.5% of the global total from 16.3% last year, he said.
However, small businesses are still recovering from the heavy blow of the pandemic, so policy support must be sustained. He quoted the phrase "no sudden U-turn" from the statement following last week's Central Economic Working Conference.
Both monetary and fiscal policies will remain flexible and guide consumption, savings and investment to ensure employment along with a sound social insurance system, optimized income distribution and an expanded middle-income population, Han said. The government will ensure good results in 2021 given it will be the centenary of the founding of the Chinese Communist Party and the beginning of the 14th five-year plan.
The pandemic and the tensions with the U.S. have made the government recognize that a more complete industrial chain is crucial to promoting the "dual circulation" strategy, Han said.
Investments by private companies are recovering, aiding growth, said Ning Jizhe, deputy head of the National Development and Reform Commission. China will swiftly carry out fiscal policies given the uncertainties and tackle local government debts, he said.