Why did China’s “Two Sessions” Lower the Economic Target for 2023?

Based on the low base of 2022, it is generally believed that China’s economic growth in 2023 should not be a big problem to exceed 5% or even 6%.

According to Wei Jie, a professor at Tsinghua University, the reference to the economic growth target at the Second Plenary Session of the 20th Central Committee in China is different from this year’s “Two Sessions”. The basic idea before the “Two Sessions” was between 5% and 6%, preferably “double five” (5.5%), and the target was set at that time at 5.5%. However, the final target announced during the “Two Sessions” was about 5%.

Why did the “Two Sessions” lower the previous estimate? Wei Jie believes there are two reasons.

Firstly, China’s economic data in February was not good. Domestic export data for January and February were released, but not the February data alone because it was difficult to interpret. According to Wei Jie, China’s exports fell by almost 47% in February.

Secondly, the United States launched a full-scale decoupling of allies from China. The 47% sharp drop in exports in February is related to the US push to decouple from China. Studies show that the US is buying less from China, not because it is spending less, but because it is not purchasing from China anymore and has shifted mainly to buying products from the EU and ASEAN. If this trend persists, China’s exports will be adversely affected this year.

Therefore, the economic growth target couldn’t be set too high. A more stable approach would be to target around 5%. Even if the growth rate is at 4.7% or 4.8%, it is still considered around 5%.

Wei Jie also mentioned that China’s domestic demand is not as easy to stimulate as imagined, and some demand will not start up immediately. From the perspective of adjusting the target, it is unlikely that we will rebound quickly this year. Otherwise, there would be no need to adjust the target during such a short period before the “Two Sessions”.

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在2022年低基数基础上，一般认为，2023年中国经济增长超过5%甚至6%应该问题不大。

据清华大学教授魏杰称，二十届二中全会的时候，对经济增长目标的提法，不是今年“两会”的提法，在“两会”之前的基本思路就是5%到6%之间，最好是“双五”（5.5%），当时定的是5.5%的指标。但是，最后公布的目标是5%左右。

为什么“两会”下调了此前的估计呢？清华大学教授魏杰认为有两个原因。

第一，二月份中国经济数据不好。国内只公布了一二月份的出口数据，没有单独公布二月份数据，因为二月份数据很难看。魏杰称，二月份中国出口下跌了差不多47%。

第二，美国全面启动了盟友与中国脱钩。二月份出口大幅下跌47%，就与美国推动与中国脱钩有关。研究显示，美国买中国的东西少了，不是因为消费少了，而是因为美国不采购中国的东西了，主要转向采购欧盟和东盟的产品。如果这样下去，今年中国的出口会很麻烦。

所以，经济增长目标不敢定高了，稳妥一点好，定在5%左右。即使是4.7%、4.8%，也在5%左右。

魏杰称，中国的内需启动不如想象的那么容易，有些需求不是想启动就能启动起来。从调整目标的状况来看，也不是想象的我们今年很快就反弹，不然不会到两会这么短的时间就调整了。