Shanghai Mayor Yang Xiong announced he’s not going to target a specific gross domestic product growth rate this year. It’s a statement that seems out of place in a country that’s grown so rapidly over the last few decades, but growth in China is slowing down.
Marketplace host Kai Ryssdal spoke with Marketplace’s China correspondent Rob Schmitz to get some context.
“It was really surreal to hear the mayor of China’s wealthiest city start a speech off by saying, ‘We’re not too concerned about GDP,'” Schmitz says. “For the past couple of decades GDP growth has been the be-all, end-all obsession for China’s government.”
According to Schmitz, there’s much more to the health of the Chinese economy than just GDP numbers. Chinese officials were so eager to boost GDP that they didn’t care how the numbers were achieved. “Up until now, a lot of government spending has been inefficient and wasteful, only benefiting the rich and the powerful,” Schmitz says.
But slower growth doesn’t mean no growth.
“It’s important to remember here that China’s economy is not imploding,” Schmitz says. “We’re still looking at growth here of above 7 percent … Making this 7 percent go further for everyone in China is what the government now seems to be focused on.”
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