China rebounds with an economic growth target above 6%

China is aiming for an economic growth rate above 6% in 2021, after scrapping its target last year.

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China's Premier Li Keqiang announced the target on Friday at the opening of this year's National People's Congress.

The target marks a return to strong growth after the Covid-19 pandemic impacted the world's second-largest economy.

Although China's economy grew last year, it only managed 2.3% growth, its weakest result in decades.

The new target highlights the Chinese economy's strong rebound after the pandemic shutdowns led to a sharp 6.8% contraction in the first quarter of 2020.

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The economy grew in the second half of 2020, and China was the only major global economy to post gains for the year, although they were slender compared to previous years.

Now the government hopes to continue that rebound.

"A target of over 6% will enable all of us to devote full energy to promoting reform, innovation, and high-quality development," Premier Li Keqiang said.

"In setting this target, we have taken into account the recovery of economic activity."

By some measures the target appears modest, falling well below the International Monetary Fund's estimate of 8.1% growth for China's economy this year.

Other analysts are also tipping stronger growth.

"The consensus for the year is about 8%-9% but this is coming from a low base. The focus is still on the quality versus the quantity of growth," said Catherine Yeung, investment director at Fidelity International in Hong Kong.

In an analyst note, Bruce Pang from investment bank China Renaissance said the more flexible target leaves some room for structural reform and a transition to a more mature economy.

"We think it likely the target will be achieved, indicating that authorities are shifting focus to the quality of growth instead of speed," he said.

Mr. Li also set a target urban unemployment rate of around 5.5%, with a goal of more than 11 million new urban jobs, up from nine million last year.

It also set a budget deficit goal of around 3.2% of gross domestic product.

However, the finance ministry expressed concern about the state of the government budget.

"The outlook for government revenue and expenditure in 2021 appears quite grave, with even greater difficulty in balancing the budget and risks in key areas such as debt that cannot be overlooked," it said in a report released at the start of the meeting.