Chinese President Xi Jinping has recently emphasized the need to protect the economic growth target. Still, an official of the central bank publicly admitted that it is difficult for the country to ensure the goal.

According to Bloomberg, Xi Jinping delivered a keynote speech to a virtual BRICS Business Forum on June 22. He stressed that China would further adjust macro policies and adopt more measures to meet the social and economic development targets for 2022 and minimize the Covid-19 impacts.

Xi said that the approach to fighting Covid would protect people’s lives and health and help stabilize the fundamentals of economic and social development as much as possible.

It is the first reference from the Chinese leader to the growth target since the Politburo meeting in April.

However, a central bank advisor admitted that China’s five-year growth target of 5.5% will be challenging. 

Wang Yiming is a member of the Monetary Policy Committee at the People’s Bank of China or central bank. He is also vice-chairman of the China Center for International Economic Exchanges.

At the China Macroeconomic Forum held on June 25, Wang said that the impacts of the recent Covid pandemic would make it challenging for China to achieve its 5.5% growth target for this year.

Wang was repeating what he predicted two months ago. At the China Wealth Management 50 Forum on April 24, he said that the short-term economic operation is still under the epidemic pressure to bring the growth rate back to more than 5% in the second quarter.

In a new Bloomberg survey, economists claimed that China’s stringent Covid-19 policies would sink the economy. As a result, they downgraded their full-year projections for China’s economic growth to 4.1%.

According to the central bank adviser Wang Yiming, China could consider introducing pro-economy policies, such as special bond issuance, to boost the economy.

Wang said that the decline in financing demand is a critical problem China must tackle.

The adviser said that the current monetary policy focuses on stabilizing liquidity, and the policy tools are more structural. Therefore, they will signal the market to guide a loose monetary environment and maintain financial stability as much as possible.

International institutions are pessimistic about China’s economic outlook this year.

Two weeks ago, the World Bank recently cut its 2022 growth forecast for China from 5.1% to 4.3%. Last month, some investment banks also slashed their forecasts for China’s growth this year, with Goldman Sachs lowering it to 4%, JPMorgan Chase to 3.7%, and UBS to 3%.

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