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Cai Fang: China’s Reasonable Economic Growth Rate Should Be between 6.2 and 6.7 Percent

On November 22, 2016, Cai Fang, Vice President of the Chinese Academy of Social Sciences, spoke at a forum on “The Ever-evolving Global Political and Economic Pattern: Integration or Fragmentation?” Cai informed those in attendance that China’s reasonable growth rate is in the range 6.2 to 6.7 percent. He postulated that, if the growth rate is above this range, it is coming from stimulus and not just from the potential growth rate and the effect of reform.

At the forum, Cai Fang stated that, according to his calculations, China’s potential growth will only be 6.2 percent during the “Thirteenth Five-Year-Plan” period [2016-2020], assuming there are no new reforms. This can be regarded as the lower limit of China’s economic growth.

If the possible effect of reform is modeled on this calculation, the growth rate may reach 6.7 percent, which should be an upper limit. In other words, China’s economic growth has a reasonable range of 6.2 to 6.7 percent.

Source: Caixin, November 23, 2016