China should not attach too much significance to 6% growth rate, says government economist

The debate on China’s economic target for next year continues

China

In an article published in the People’s Daily, a deputy director at the DRC – an advisory body to the state council – Wang Yiming says that “6% is not a special watershed”.

Adding that “the growth rate, may it be higher or lower, is not the main problem”. But instead “the key is the quality and efficiency of growth”.
Take this with a pinch of salt for now but if we start to see more commentary such as this next year, it could be a sign that China may just finally let up on the 6% level – however the calculations to reach that figure may be.
As things stand, China has a bigger issue at hand with bond defaults starting to be on the rise. The latest news today is that a local government unit barely managed to escape that with a late payment, which otherwise would have added another scare to markets.
I alluded to another case last month here. And I would expect more such cases to crop up in 2020 and that will surely add to more worries surrounding the Chinese economy over the next few years.
An interesting stat to start the week is that the value of China dollar bonds with yields above 15% have jumped up to $25.6 billion as of today. It was only $21.5 billion last week.
That’s almost a 20% jump as the bond market starts to sense some fear – which will add to funding burden for businesses in the country, and the feedback loop continues.