GDP Photo: VCG

 It is not low to set China's GDP growth goal above 6 percent for 2021, Chinese Premier Li Keqiang told the press on Thursday, adding that growth that is too fast is not steady.

"Going fast for a short while may not be stable; only by walking steadily, can we walk with power," Li said.

Responding to the projections made by multiple international institutions on China's GDP growth at around 8 percent for 2021—higher than China's goal, Li said "We are not drawing up a plan, instead, we are guiding expectation. We hope to guide the expectation to consolidate the foundation of economic recovery, to promote high-quality development and keep sustainability."

China witnessed a V-shape growth last year, as GDP in the first quarter contracted by 6.8 percent, before achieving 2.3 percent growth annually. 

According to Li, most of the 2 trillion yuan ($308 billion) newly-added fiscal fees last year were given to market entities and people's urgent needs, with the majority being tax and fee cuts. 

In 2021, around 2.8 trillion yuan will be allocated to prefecture and county level governments, significantly more than last year, according to the government work report.

Calming worries concerning China's massive fiscal support may be rolled back as the focus shifts toward de-risking in financial, housing and other areas, Li reaffirmed there will be no sudden shifts in China's macro policy this year. 

"We should adjust policy reasonably as well as moderately," he said, stressing policy must maintain "continuity and sustainability."

China has lowered its budget deficit ratio to 3.2 percent for 2021, a relatively moderate cut from around 3.6 percent last year, according to the government work report.

The total deficit budget in 2021 is set at 3.57 trillion yuan, compared to 3.76 trillion yuan in 2020, according to the report.

"The tone of China's 2021 fiscal policy is to gradually return to normalcy and return to near pre-COVID conditions," Ye Qing, a professor of Zhongnan University of Economics and Law in Wuhan, told the Global Times.

Bonds issued from local governments will be only slightly lower than last year. In 2021, a total of 3.65 trillion yuan is permitted to be issued in local government special-purpose bonds, compared to last year's 3.75 trillion yuan. No special COVID-19 bonds will be issued.

A senior official from China's central bank on Wednesday reiterated that the country will ensure "continuity and stability" in macro policies for 2021. "The macro financial policy will maintain continuity, stability and sustainability in 2021," Chen Yulu, a deputy governor of the People's Bank of China and a member of the Chinese People's Political Consultative Conference (CPPCC) National Committee, said on the sidelines of this year's two sessions.

Experts noted that there have already been shifts in some fiscal policies, as policymakers seek to leave some room to offer support for potential risks and challenges later this year.

Tian Yun, a vice director of the Beijing Economic Operation Association and a former economist at the state economic planning agency, said that potential risks and challenges faced by some smaller banks - as well as small and micro-sized businesses that focus on the domestic market - would require sufficient fiscal support later in the year.

Global Times