China GDP target ‘difficult’ to achieve, says PBOC adviser

Bloomberg

Effects related to the Covid-19 pandemic in recent months will make it challenging for China to meet its 5.5% annual growth target, a central bank adviser said, adding that pro-economy policies including special bond issuance could be on the way.
China’s economy could see a strong rebound in the second half, “but difficulties remain for the 5.5% target,” Wang Yiming, an adviser to the monetary policy committee of the People’s Bank of China (PBOC), said at a live-streamed forum. The country could consider trying to boost the economy by introducing special national bonds that don’t count as financial deficits, said Wang, without
giving details.
The comments came after President Xi Jinping reaffirmed the GDP target will be met despite concerns from economists that Beijing’s stringent Covid policies would sink the economy.
It is widely speculated that China could issue special sovereign bonds again. The government sold 1 trillion yuan ($150 billion) of the bonds in 2020 to pay for measures to fight the pandemic, but didn’t sell any last year or include them in the bond plan for this year.
Wang, who helps craft China’s monetary policies, said the decline in financing demand is the key problem the country needs to tackle.
“The current monetary policy focuses on stabilising liquidity, and the policy tools are more structural ones, which send a signal to the market to guide a loose monetary environment and maintain financial stability as much as possible,” he said, adding that market
liquidity “is abundant.”