NPC 2020: China drops its GDP target this year amid uncertainties caused by coronavirus pandemic, East Asia News & Top Stories

BEIJING – China has not set a gross domestic product (GDP) target this year, a move widely awaited by economists.

Presenting his work report on Friday morning (May 22) at the Great Hall of the People, Premier Li Keqiang said a target had not been given due to uncertainties caused by the coronavirus pandemic.

“This is because our country will be faced with certain factors that are difficult to predict in its development, due to the great uncertainty regarding the Covid-19 pandemic and the global economic and trade environment,” he said.

“Not setting a specific target for economic growth will allow all of us to focus on stability on the six fronts and security in all six areas.”

The six fronts concern employment, the financial sector, foreign trade, foreign investment, domestic investment and expectations.

The six areas refer to job security, stable living needs, operations of market entities, food and energy security, stable industrial and supply chains, and normal functioning of primary governments.

Before the coronavirus outbreak, economists expected Beijing to set a GDP growth target of around 6% for this year.

Last year, China’s economy, battered by a fierce trade war with the United States, grew 6.1% – the country’s slowest growth rate since 1990.

Premier Li announced at the opening of last year’s parliamentary session a growth target of between 6 and 6.5 percent.

Analysts had predicted that China would not set a target for GDP growth this year, given uncertainties in the economy and concerns of a new wave of the epidemic. The economy contracted 6.8% in the first three months of the year, the worst on record.

Among the main objectives set for the year is the creation of more than nine million new urban jobs, against 11 million last year.

An urban unemployment rate target of around 6 percent was also given, up from 5.5 percent last year.

Another target was an increase in the consumer price index (CPI) of about 3.5 percent.

Tax policy

Premier Li also pledged to pursue a “more proactive and efficient fiscal policy,” fixing China’s deficit-to-GDP ratio at over 3.6%, breaking a long-standing red line of 3% and a $ 1 trillion increase in the deficit. yuan (S $ 199 billion) compared to last year.

The government has pledged to issue 1,000 billion yuan of government bonds.

At the same time, it will use monetary policy tools such as reserve requirement rate cuts, interest rate cuts and loans to help businesses and stimulate the economy.

Other measures announced include further reductions in taxes and fees, flexible employment support and help for micro, small and medium enterprises to access loans and stay afloat.

Premier Li took half the time he took last year to present the report, which was only 23 pages long, compared to 43 last year.

Chinese state television said this could be because the government wanted the gathering of delegates and diplomats at the opening ceremony to be short, in order to reduce exposure due to Covid-19.

Some 5,000 delegates from across the country gathered in Beijing for the annual parliamentary meetings, better known as two sessions, or lianghui.

Traditionally held in March, it has been postponed this year due to the coronavirus outbreak and will be shortened from around 10 days to a week.

The country’s main political advisory body, the Chinese People’s Political Consultative Conference, began its session on Thursday.

Nearly 3,000 lawmakers are meeting to take stock of the government’s work over the past year, pass laws and approve budgets at the National People’s Congress meeting starting on Friday.

Among the proposals lawmakers will discuss is a draft resolution for a controversial national security law aimed at curbing subversive or terrorist activity and foreign interference in Hong Kong.

Parliamentarians are also expected to adopt China’s first civil code, which has been drafted for years. The heavy 84-chapter bill covers a wide range: from personal data protection to property rights to sexual harassment.

Premier Li on Friday pledged to continue market reforms, boost domestic consumption, and increase investment and construction of new infrastructure such as next-generation information networks.

He also singled out Hubei province, where the first cases of the coronavirus were reported late last year, and pledged a set of policies to get it back on track.

In addition, the government will improve its public health system and “resolutely prevent a resurgence of Covid-19,” Li said.

This includes building more medical facilities for epidemic control and treatment, and improving mechanisms for direct notification and early warning of infectious diseases.

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