China will not set an economic growth target for the first time in 2020, Premier Li Keqiang confirmed at the National People’s Congress on Friday in Beijing.
The move was expected in some quarters, with the economy having contracted by 6.8 per cent in the first quarter of 2020 compared to a year earlier, under huge pressure from the coronavirus pandemic.
“We have not set the specific [gross domestic product] target mainly due to the global pandemic and big uncertainties in the economy and trade,” read the work report, adding that China was facing an “unpredictable” time.
China’s government has, though, set a target of creating 9 million new urban jobs, compared to 11 million last year, and a surveyed urban unemployment rate of around 6 per cent, compared to 5.5 per cent last year. In 2019, China created 13.52 million new urban jobs.
We need to blaze a new path that enables us to respond effectively to shocks and sustain a positive growth cycleNPC work report
The target for consumer price index (CPI) growth for the year is around 3.5 per cent, compared to 3 per cent last year.
Beijing has set a local special bond quota at 3.75 trillion yuan (US$527 billion), compared to 2.15 trillion yuan last year.
It will issue 1 trillion yuan in special Treasury bonds, targeting a fiscal deficit ratio of 3.6 per cent, compared to 2.8 per cent last year.
As the special Treasury bonds are not included in central government’s budget, they do not contribute to raising the deficit-to-gross domestic product (GDP) ratio.
“We must be clear that efforts to stabilise employment, ensure living standards, eliminate poverty, and prevent and defuse risks must be underpinned by economic growth; so ensuring stable economic performance is of crucial significance,” the work report continued.
“We need to pursue reform and opening up as a means to stabilise employment, ensure people’s well-being, stimulate consumption, energise the market, and achieve stable growth.
We need to blaze a new path that enables us to respond effectively to shocks and sustain a positive growth cycle.”
The report also said China would focus on more stable and higher-quality imports and exports, and a basic equilibrium in the balance of payments
Growth in personal income that is basically in step with economic growth, elimination of poverty among all rural residents living below the current poverty line and in all poor counties, effective prevention and control of major financial risks and a further drop in energy consumption per unit of GDP and the discharge of major pollutants were also included.
“We will work harder to improve the composition of fiscal spending.
We will see that spending on people’s basic well-being is only increased and not cut, ensure spending in key areas, and resolutely cut general expenditures.
“Construction of new government buildings and wasteful and excessive spending will be strictly prohibited. Governments at all levels must truly tighten their belt.
The central government will take the lead by committing to negative growth in its budgetary spending, with a more than 50 per cent cut to outlays on non-essential and non-obligatory items.”