China is set to see its economic growth fall from 6.5% in the next five years to around 5% per year from 2021 to 2025, a central bank official said. Speaking at a forum in Shenzhen, Yao Yudong, the head of the Peoples' Bank of China Research Institute of Finance and Banking said that China's economy will see an "L-shaped" recovery.
Yao said that the world's second largest economy has shown some positive signs but said the government needs to push forward reforms to ensure long-term growth momentum.
China has been seeking to keep its annual economic growth at or above 6.5% in the next five years. However Prime Minister Li Keqiang has acknowledged that it is a "tough battle."
The Chinese government forecast the economy to grow between 6.5% and 7% this year. Data released in January showed China's economy grew at its slowest pace in 25 years in 2015 as the fourth quarter GDP slowed down to 6.9%.
On 16 March, the People's Bank Governor Zhou Xiaochuan said that "excessive monetary policy stimulus isn't necessary" to achieve the GDP growth target and that barring any economic or financial turmoil monetary policy would remain "prudent".
Speaking in Beijing on 20 March at the opening of the two day China Development Forum 2016, Mulyani Indrawati, the managing director of the World Bank said that there was little doubt that China's economy would continue to expand but added that it was important to focus on the source of growth rather than on the pace of expansion.
Similarly, Christine Lagarde, the head of the International Monetary Fund, said that China's 13th Five-Year-Plane will help the world's second largest economy achieve more sustainable growth. "We should expect that, like any major transition, it will be at times bumpy." She warned that a delicate balance needs to be struck between shifting to a relatively slower but more sustainable pace of growth and advancing much needed structural reforms.