Lawmakers to stress stability, infra investments

"Stability will be the top focus of economic policies this year," said Zhang Lianqi, a member of the Standing Committee of the 13th National Committee of the Chinese People's Political Consultative Conference. A 5 percent GDP growth could be the bottom line, and the country may set this year's GDP growth target at around 5.5 percent, he said.

Kang Yong, chief economist at KPMG China, also said this year's GDP growth target may be around 5.5 percent, based on the regional economic growth targets unveiled by local governments.

All the 31 provincial-level regions in the Chinese mainland have announced their regional annual economic growth targets. The targets of 29 regions were above or around 5.5 percent year-on-year. Only Beijing and Tianjin aim to achieve regional economic growth of "more than 5 percent" this year.

"A growth target of around 5.5 percent would mark a decline from last year's 8.1 percent growth and even the lowest level in years. Yet, the target would still reflect stable economic conditions," said Kang.

This is because last year's fast growth was exceptional and mainly attributable to the super-low comparison base in 2020 due to initial COVID-19 lockdowns, he said.

On the two-year average basis that corrects the distortion of comparison bases, China's economy grew by 5.1 percent in 2021. A GDP growth target of around 5.5 percent would, therefore, indicate the economy may even accelerate compared with last year, Kang said.

Other experts said a key pillar to underpin such acceleration will be investment in infrastructure. Serving as an effective buffer against a potential slowdown in export growth, infrastructure investment may register an annual growth of high single digits or even double digits, thanks to governmental push, versus last year's 0.4 percent growth.

"With consumption growing mildly due to lukewarm job and wage growth, the engine of growth for 2022 has to be infrastructure investments," said Iris Pang, chief China economist at Dutch bank ING.

Pang said she expects infrastructure investment to grow by around, or even more than, 10 percent this year, backed by the funding of local government special bonds, whose annual quota－to be unveiled at the two sessions－may total between 3.46 trillion yuan and 3.96 trillion yuan, versus 3.65 trillion yuan last year.