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Economy

China GDP target in play as economic work conference begins

Meeting to test Beijing's will for more fiscal stimulus as tariff deadline nears

Communist Party officials hold the Central Economic Work Conference at the heavily guarded Jingxi Hotel in Beijing.   © Reuters

BEIJING -- Senior Chinese policymakers have begun discussing the nation's economic blueprint for 2020, with the possibility of lowering the headline growth target for a second straight year.

Signs were evident Tuesday morning that the key Central Economic Work Conference had gotten underway. Security was tight around the Beijing hotel that serves as the venue. Black vehicles believed to be carrying participants were allowed through.

The conference is held every December, with this year's slated to conclude Thursday. Top officials were expected to discuss whether to lower the gross domestic product growth target for next year in line with economic pressures.

For 2019, China had cut the target to between 6% and 6.5% from the 2018 goal of "around 6.5%."

The Communist Party also seeks to double China's GDP from 2010 to 2020. This is achievable even if growth misses 6% in 2020, according to estimates based on the latest national economic census.

Many expect the government to increase deficit spending to prop up the economy. That would mean lifting the ratio of the fiscal deficit to GDP from the current 2.8%.

Numerical goals discussed at the economic work conference will be revealed in a government work report to be presented this coming March at the next session of the National People's Congress, China's parliament.

Top Communist Party officials attend the economic work conference, as do cabinet ministers and regional government officials. Executives at major state-owned enterprises, along with military leaders, are also expected to show.

The trade war with the U.S. will likely be on the agenda. Last year's meeting yielded a declaration that to advance bilateral trade negotiations, it was "necessary to implement the consensus" reached by Chinese President Xi Jinping and U.S. President Donald Trump at the Group of 20 summit in Argentina.

But the trade talks remain unresolved, with the U.S. slated to slap a 15% additional tariff on $160 billion of Chinese products Sunday.

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