Beijing Scraps GDP Target, a Bad Sign for World Reliant on China Growth
As China acknowledges the effects of the coronavirus pandemic, the country has, for the first time in around 25 years, not released an economic growth target for 2020, according to The Wall Street Journal.
China suffered its worst economic contractions in 40 years, and is now seemingly focused on careful repair. The latest news contrasts Xi Junping’s original plans of doubling the country’s economy and ending poverty. With at least 5.5 percent in economic growth needed, Junping’s goals are far from accomplished.
On Friday, China’s Finance Ministry announced a target fiscal budget deficit of more than 3.6 percent of the nation’s expected GDP. After being delayed for three months, The National People’s Congress met on Friday, where Premier Li Keqiang disclosed China’s verdict on the growth target. Mr. Li explained the decision to eradicate a growth target, saying, “because our country will face some factors that are difficult to predict….(having no target) will enable all of us to concentrate on ensuring stability...and security.”
Moving forward, Mr. Li said China looks to create 9 million new jobs in 2020. Last year China recorded 13.52 million new jobs created by the government. As China’s urban jobless rate remained at 6.0 percent in April, only 0.2 percent away from February's record high, the Chinese government also plans on capping the number at 6.0 percent. Last year’s cap was 5.5 percent.
The Chinese government offered tax breaks and electricity rebates for small businesses (for the year) on Friday, as well as delaying the repayment of principal and interest on existing loans (until March) for small businesses.
National rail capital funds are also recieving a boost of 100 billion yuan, and the government plans to distribute local government special-purpose bonds and treasury bonds to cities in a bid to raise employment, consumer spending power, and investment. Mr. Li added that Beijing will look to maintain consumer-price inflation at about 3.5 percent in 2020. Last year, the same goal held a number of around 3 percent.