Xi’s 2022 GDP target will be moment of truth – Reuters

Xi’s 2022 GDP target will be moment of truth – Reuters

Soldiers of People's Liberation Army (PLA) are seen before a giant screen as Chinese President Xi Jinping speaks at the military parade marking the 70th founding anniversary of People's Republic of China, on its National Day in Beijing, China October 1, 2019. REUTERS/Jason Lee/File Photo To match Special Report TAIWAN-CHINA/SUBMARINES - RC260R9P0G4G

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HONG KONG, Dec 20 (Reuters Breakingviews) - China is preparing to set its most important GDP target since the global financial crisis. The country faces an unprecedented swathe of economic challenges, implying a significant downward revision to growth goals from the “above 6%” for 2021 to something that signals sustained pressure on bad debt. What President Xi Jinping chooses will measure his power to drag China onto a less wasteful development path.

The Chinese Communist Party has every reason to downgrade expectations as flattering comparisons to earlier Covid-19 damage fade. Beyond the threat from new variants, authorities in Beijing have initiated a broad campaign to curb financial risk in the property sector, which contributes between a quarter and a third of the country’s economic activity. They have their work cut out ensuring a sector shaken by China Evergrande (3333.HK) and others