(May 22): China has abandoned its usual practice of setting a numerical target for economic growth this year due to the turmoil caused by the coronavirus pandemic, according to the text of Premier Li Keqiang’s annual policy address set for Friday and seen by Bloomberg News.
“I would like to point out that we have not set a specific target for economic growth this year,” the report said. “This is because our country will face some factors that are difficult to predict in its development due to the great uncertainty regarding the Covid-19 pandemic and the world economic and trade environment.”
The shifting away from a hard target for output growth breaks with decades of Communist Party planning habits and is an admission of the deep rupture that the disease has caused in the world’s second-largest economy. With the growth outlook depending also on the efforts of trading partners to rein in the pandemic, the government is shifting its focus to employment and maintaining stability.
Li is due to set a target for urban job creation of over 9 million jobs, lower than the previous year’s target of around 11 million, and a target for the urban surveyed unemployment rate of around 6%, higher than 2019’s goal, according to the document.
The budget deficit target was widened to more than 3.6% of GDP, implying a significantly larger shortfall than 2019’s target of 2.8%. Greater spending on efforts to restart the economy and control the spread of the coronavirus will be funded by the issuance of 1 trillion yuan (S$199.2 billion) in sovereign debt.
