Trilemma

23 Feb 2021 By Yawen Chen Follow @ywchen1

China may skip setting a national growth target for a second year. But provinces have set their own, suggesting an expansion of at least 6.8% in aggregate. The central bank doesn’t want to ease, while the finance ministry is reluctant to spend. It’s quite the trilemma.

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China will likely avoid setting a 2021 growth target, dropping the closely watched measure for a second straight year on concerns that maintaining one could encourage provincial economies to ramp up debt, Reuters reported on Jan. 28 citing unnamed policy sources.

All of China’s 31 provinces, autonomous regions and centrally governed municipalities have set their targeted GDP growth rate at 6% or higher for 2021, according to work reports from local governments issued in recent months. The provinces of Heilongjiang and Hebei were the last two to publish their targets on Feb. 19.

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