China aban­dons growth fore­cast

The Weekend Australian - - FRONT PAGE - WILL GLAS­GOW

China has aban­doned an eco­nomic growth tar­get for 2020, as the coun­try’s lead­ers con­cede they face “chal­lenges like never be­fore” and their ad­vis­ers warn of a “sec­ond wave” of the coro­n­avirus.

Premier Li Ke­qiang re­vealed the news — a re­mark­able de­vel­op­ment in China’s highly cen­tralised po­lit­i­cal sys­tem — while de­liv­er­ing the Work Re­port, a state-ofthe-na­tion doc­u­ment, which also con­firmed a con­tro­ver­sial plan to im­pose Bei­jing’s hard­line se­cu­rity ap­pa­ra­tus on Hong Kong.

“We have not set a spe­cific tar­get for eco­nomic growth this year. This is be­cause our coun­try will face some fac­tors that are dif­fi­cult to pre­dict,” Mr Li said in the Great Hall of the Peo­ple in front of the elite of the rul­ing Chi­nese Com­mu­nist Party in Bei­jing.

The lack of a growth tar­get and the Hong Kong clam­p­down — which is pre­dicted to in­flame the city’s pro-democ­racy protests — shows Aus­tralia’s big­gest trad­ing part­ner is strug­gling to ne­go­ti­ate the COVID-19 eco­nomic dis­rup­tion while also at­tempt­ing to seize strate­gic op­por­tu­ni­ties.

Pek­ing Univer­sity eco­nomics pro­fes­sor Yao Yang said the lack of a tar­get would “al­low more room for macroe­co­nomic pol­icy” and would leave the govern­ment in a bet­ter po­si­tion to re­spond to fur­ther eco­nomic de­te­ri­o­ra­tion.

“We have to be pre­pared for a sec­ond wave of the coro­n­avirus,” Pro­fes­sor Yao told The Week­end Aus­tralian.

It is the first time Bei­jing has omit­ted a growth tar­get since it be­gan the prac­tice in 1994, and it comes af­ter China re­ported a 6.1 per cent gain in GDP last year, its slow­est pace since its in­ter­na­tional re­la­tions were im­per­illed af­ter the Tianan­men Square crack­down in 1989.

In the first quar­ter of 2020, its econ­omy shrunk by 6.8 per cent from a year ear­lier, the first con­trac­tion in more than four decades.

While the Work Re­port con­tains a com­mit­ment to cre­ate nine mil­lion new jobs this year, its COVID-19 stim­u­lus mea­sures were mod­est by global stan­dards.

De­spite the eco­nomic slow­down, China’s de­fence spend­ing in­creased by 6.6 per cent, al­though that is down from dou­ble-digit in­creases that have given the coun­try the sec­ond-big­gest de­fence bud­get in the world be­hind the US.

The Peo­ple’s Lib­er­a­tion Army, the rul­ing Com­mu­nist Party’s mil­i­tary wing, is the world’s largest stand­ing army, and in re­cent years it has added air­craft car­ri­ers, nu­clear-pow­ered sub­marines and stealth fight­ers to its arse­nal, most of them pro­duced do­mes­ti­cally.

Mr Li de­liv­ered the Work Re­port — which he read out in full in an hour, its briefest it­er­a­tion for decades — on the first day of the Na­tional Peo­ple’s Congress, the big­gest po­lit­i­cal gath­er­ing in the Chi­nese gov­ern­ing sys­tem.

While the speech re­vealed the prag­ma­tism of China’s rul­ing party on eco­nomic af­fairs, it was also wo­ven with the rev­er­ence for

Chi­nese Pres­i­dent Xi Jin­ping that has in­ten­si­fied since he took over as Gen­eral Sec­re­tary in 2012.

Mr Li re­peated six times that China was led by the Cen­tral Com­mu­nist Party “with Com­rade Xi Jin­ping at its core”.

On an­other three oc­ca­sions, Mr Li said the world’s sec­ond-big­gest econ­omy was fol­low­ing the “guid­ance of Xi Jin­ping Thought on So­cial­ism with Chi­nese Char­ac­ter­is­tics for a New Era”, in­clud­ing in its “Peo­ple’s War” against

COVID-19. “Gen­eral Sec­re­tary Xi Jin­ping has … per­son­ally taken charge and planned our re­sponse,” he said, while not­ing the coun­try’s on­go­ing in­ter­na­tional chal­lenges.

“China will face chal­lenges like never be­fore,” Mr Li said.

The hard­line of the Xi era was also on show. Mr Li said China had “made ma­jor strate­gic achieve­ments in our re­sponse to COVID-19” and con­firmed Bei­jing’s in­ten­tion to fur­ther its con­trol over its spe­cial ad­min­is­tra­tive re­gion of Hong Kong.

“We will es­tab­lish sound le­gal sys­tems and en­force­ment mech­a­nisms for safe­guard­ing na­tional se­cu­rity,” Mr Li said, even as Hong Kong chief ex­ec­u­tive Car­rie Lam lis­tened on stage.

Be­fore the speech, Bei­jing re­vealed it would ef­fec­tively by­pass Hong Kong’s leg­isla­tive process.

A draft of the leg­is­la­tion cir­cu­lated among del­e­gates on Fri­day said Bei­jing would im­pose its na­tional se­cu­rity ap­pa­ra­tus on Hong Kong to stop sub­ver­sive ac­tiv­ity.

“This is the end of Hong Kong,” said pro-democ­racy Hong Kong leg­is­la­tor Den­nis Kwok. And some an­a­lysts pre­dicted a vi­o­lent re­ac­tion in Hong Kong, as Wash­ing­ton con­demned the change.

“If it hap­pens, we’ll ad­dress that is­sue very strongly,” US Pres­i­dent Don­ald Trump re­sponded.

While the US was men­tioned only once — in re­la­tion to the USChina trade deal, which Mr Trump has threat­ened to aban­don — the dire state of the bi­lat­eral re­la­tion­ship loomed over the meet­ing.

Just hours be­fore the Bei­jing gath­er­ing, Mr Trump at­tacked Mr Xi and his lead­er­ship group for their han­dling of the coro­n­avirus.

“It all comes from the top. They could have eas­ily stopped the plague, but they didn’t,” the Pres­i­dent wrote on Twit­ter.

The Na­tional Peo­ple’s Congress, which was de­layed by al­most three months be­cause of the pan­demic, be­gan with a mo­ment of si­lence to mark the more than 4000 Chi­nese cit­i­zens who have died from the coro­n­avirus.

The 2897 del­e­gates all wore face masks, ex­cept for the mem­bers of the Com­mu­nist Party’s polit­buro, led by Mr Xi, who was seated on the stage.

GETTY IM­AGES

Del­e­gates ap­plaud as Chi­nese Pres­i­dent Xi Jin­ping ar­rives for the open­ing of the Na­tional Peo­ple’s Congress in the Great Hall of the Peo­ple in Bei­jing

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