February 28, 2017
There are many good reasons to criticize China’s obsession with GDP growth targets. Setting such targets for growth – and therefore for total demand – is a relic from the era of Communist planning in a closed-off economy. It is a bad fit for today’s open economy, which owes a considerable part of its growth to external demand, the development of which China’s planners cannot directly influence. In times of double-digit growth rates, growth targeting was not a major issue.