Share this on Twitter Share this on Facebook Share this on LinkedIn Share this on Sina Weibo Share this on Wechat Share this on LinkedIn Yu Yongding argues that the “government’s cautious attitude toward expansionary macroeconomic policy reflects its vigilance regarding inflation and financial risks” but that it should focus on growth. In order to do that, the government will need to invest a lot more in infrastructure than it plans to now. Credit: ILO Asia-Pacific, Creative Commons BEIJING – The Chinese economy grew by 6.5 percent in the fourth quarter of 2020, providing a strong indication that it has recovered from the COVID-19 shock. The market consensus is that, due to base effects, GDP growth shot up to more than 18 percent year on year in the first quarter of 2021, and will fall steadily in the remaining three quarters of the year before finally stabilizing. Addressing this year’s meeting of the National People’s Congress last month, Prime Minister Li Keqiang announced that China’s growth target for 2021 is “above 6 percent.” While the economy’s growth momentum looks strong at the moment, there are signs that China may risk tightening fiscal and monetary policy too soon. According to the Ministry of Finance, general budget revenues will increase by 8.1 percent this year, while general budget expenditures will grow by just 1.8 percent. It is rare for government spending to grow so much more slowly tSubscribe or login to read the rest. Subscribers get full access to: Exclusive longform investigative journalism, Q&As, news and analysis, and data on Chinese business elites and corporations. We publish China scoops you won't find anywhere else. A weekly curated reading list on China from David Barboza, Pulitzer Prize-winning former Shanghai correspondent for The New York Times. A daily roundup of China finance, business and economics headlines. We offer discounts for groups, institutions and students. Go to our Subscriptions page for details.