China, the world’s second largest economy, is aiming for at least 6% economic growth this year, demonstrating the government’s confidence in its Covid pandemic recovery.

Speaking at the National People’s Congress, Premier Li Keqiang said: “Facing the adverse and severe impact of a sudden coronavirus epidemic and a deep global economic recession, we the Chinese people . . . responded with tremendous tenacity. 

“As a general target, China’s growth rate has been set at over 6% for this year. In setting this target, we have taken into account the recovery of economic activity.”

However, the 2021 target was below the consensus of most analysts, who expect growth could exceed 8% this year. Chinese equities fell as a result.

“The Chinese economy should very easily coast to the target growth rate,” said Jeremy Stevens, chief China economist at Standard Bank. “8% is more plausible.”

Iris Pang, chief economist for Greater China at ING, told Reuters that continued fiscal latitude was a more meaningful target than the growth target.

“The very low GDP growth target is like there is no target at all because the consensus is 8% and my forecast is 7%,” she said.

“I believe that most of the money will be used for technology R&D and continue to provide some buffer for job stability just in case Covid will have a comeback,” she added.

In Premier Li’s speech, he said the 2021 target for consumer price inflation is around 3% but there was no given target for job creation over the next five years.