MNI POLICY: China Should Set 2020 Growth at 5.5-6%: Advisor

     BEIJING (MNI) - China should set next year's GDP growth target at between

5.5% and 6% and refrain from ensuring a minimum 6% hard target, according to Liu

Yuanchun, an advisor to the State Council and a vice president of Renmin

University. 

     Instead, policymakers should maintain a strategy of transforming the

economy through high-quality growth, Liu told the China Macroeconomy Forum on

Saturday.

     China can now reach its goal of becoming a "moderately prosperous society

by 2020" with just 5% growth next year, Liu said. Last week, the official 2018

gross domestic output was revised up by the bureau of statistics to CNY91.9

trillion, 2.1% more than the preliminary figure.

     Growth of 5.5% can prevent large-scale unemployment while 6% expansion

leads to 13 million new urban jobs, Liu said 

     Any slowdown in China's economy may be moderated by further reform,

countercyclical policies and a more rational approach towards China-U.S. trade

frictions, Liu said.

     Other points made by Liu and in the report:

     --CPI is forecast to be 2.3% in 2020. Pork prices may decline year-on-year

in the first half of 2020 while supply recovers in the second half. 

     --Investment and consumption may bottom out in 2020, though a significant

rebound isn't likely. Fixed-asset investment may grow 5.5% y/y, while retail

sales may come in at 8.0%.

     --M2 growth may be faster than nominal GDP growth in 2020, reaching 8.5-9%

y/y. Aggregate financing growth should stay at around 11% to meet the

requirement of tightening financial regulation.

     --The target deficit-to-GDP ratio can breach 3% in 2020 to allow more tax

and fee cuts. The cuts should shift to benefiting consumers from the producer

side.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: wanxia.lin@marketnews.com

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

[TOPICS: M$A$$$,M$Q$$$,MGQ$$$]