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Xinyi Wu

Sylvia Ma

Achieving this year’s inflation target would be one of China’s top economic tasks, a prominent economist and government adviser said, as it was pivotal to accomplishing other government priorities such as boosting consumption, raising incomes and achieving the required headline growth figures.
“The inflation target corresponds to a state of relative equilibrium between supply and demand,” Zhang Bin, deputy director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, said on Thursday.
“Among the various macroeconomic objectives, I believe the most crucial one is the inflation target.”
Also a member of the National Committee of the Chinese People’s Political Consultative Conference, Zhang’s comments came as Beijing endeavours to emerge from a period of deflationary pressure and see the country’s annual inflation rate head towards 2 per cent – its target for this year.
Two per cent is also the level at which the US hopes to cap its inflation.
The annual session of the CPPCC, China’s top political advisory body, convened in Beijing this week alongside that of the National People’s Congress, the country’s legislature. Collectively known as the “two sessions”, they are a key window to understanding Beijing’s policy direction.
In the government work report delivered to the NPC on Thursday, Premier Li Qiang announced that the economic growth target for the year would be between 4.5 per cent and 5 per cent, the lowest on record.
“The range represents a feasible target, where the economy will neither overheat nor cool down too much,” Zhang said.
He added that it would also allow China to achieve its long-term goal of having its per capita gross domestic product reach the level of a moderately developed country by 2035.
Zhang said that boosting demand would raise prices, which would, in turn, bolster business earnings and lift workers’ wages, maintaining a reasonable growth rate.
China’s inflation target remains unchanged from last year, when policymakers lowered it from a long-standing goal of 3 per cent.
China has been grappling with deflationary pressure for years, with weak domestic demand and persistent excess supply weighing on prices. Its consumer price index was flat last year, after rising just 0.2 per cent in both 2023 and 2024.
The situation stands in contrast with the United States, where policymakers are focused on taming inflation after it rose to 8 per cent in 2022, the highest since the early 1980s, when prices rose during an oil crisis.
More proactive and effective macroeconomic policies should be implemented to expand domestic demand
Chen Changsheng, State Council Research Office
The US Federal Reserve has long sought to get America’s inflation rate down to 2 per cent. It stood at 2.4 per cent in January, easing from 2.7 per cent in December.
The difference between China and the US stemmed from the latter having relatively stronger domestic demand, Zhang said.
Chen Changsheng, deputy director of the State Council Research Office, told a news conference on Thursday that macro-level efforts were needed to raise the overall price level.
“On one hand, more proactive and effective macroeconomic policies should be implemented to expand domestic demand, boost consumption and increase effective investment,” said Chen, who was a member of the group that drafted the government work report.
“On the other hand, supply-side reforms, especially those addressing ‘involution’, should be further deepened,” he added, referring to the cutthroat market competition that has driven prices lower.
January’s CPI reading, following a recalibration of the weightings used, came in at 0.2 per cent in both year-on-year and month-on-month terms, government data showed.


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Economist Zhang Bin says this year’s 2 per cent inflation target ‘corresponds to a state of relative equilibrium between supply and demand’


Economist Zhang Bin says this year’s 2 per cent inflation target ‘corresponds to a state of relative equilibrium between supply and demand’.


Hitting inflation target is key to China’s other economic goals, adviser says

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Economist Zhang Bin says this year’s 2 per cent inflation target ‘corresponds to a state of relative equilibrium between supply and demand’

Economist Zhang Bin says this year’s 2 per cent inflation target ‘corresponds to a state of relative equilibrium between supply and demand’