No annual growth target for virus-hit China, a first in years

Marco Green
May 22, 2020

A report of the National People's Congress, seen by the South China Morning Post, said: "We have not set the specific [gross domestic product] target mainly due to the global pandemic and big uncertainties in the economy and trade".

Domestic consumption, investment and exports are falling, and the pressure on employment is rising significantly, while financial risks are mounting, he warned.

The government is due to set a target for urban job creation of more than nine million jobs, lower than the previous year's target of approximately 11 million and a target for the urban surveyed unemployment rate of about 6 percent, higher than 2019's goal, according to the document.

Parliament spokesman Zhang Yesui said Thursday the chamber will introduce a proposal for a national security law in Hong Kong, in a move the United States warned would be "highly destabilising" and which is likely to stoke further unrest in the financial hub.

The government will issue 1 trillion yuan in special treasury bonds this year, the first such issuance.

China has front-loaded a quota of 2.29 trillion yuan in local government special bonds in 2020.

Almost 3,000 lawmakers will meet 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 Friday.

Li's report did not offer "anything too out of the ordinary", said Nie Wen, economist at Shanghai-based Hwabao Trust, "reinforcing views that China would not resort to mass stimulus that some market players have been betting on".

Private sector analysts say as many as 30 per cent of the country's 442 million urban workers - or as many as 130 million people - lost jobs at least temporarily when the economy shut down to fight the virus, and as many as 25 million jobs might be lost for good this year.

In line with the slower economy, China will raise defence spending by 6.6% this year, the slowest in three decades, while the budget for environmental protection will increase a modest 4%.

Fiscal policy will be more proactive and monetary policy more flexible, Li said in his report, adding that growth in M2 - a broad gauge of money supply - and total social financing will be significantly higher this year.

Since early February, the central bank has unveiled a series of measures from making cheap loans and providing payment relief to firms that have been hardest hit by the virus outbreak, to cutting lending rates and banks' reserve requirements. The one-year LPR rate is now 3.85 percent.

The tax and fee burden shouldered by companies will be cut by 2.5 trillion yuan this year, Li said.

Other reports by Click Lancashire

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