Na­tion fo­cuses on qual­ity de­vel­op­ment

China Daily (Hong Kong) - - FRONT PAGE - By XIN ZHIMING and LI XIANG

China’s de­ci­sion not to set a GDP growth tar­get this year does not mean it has at­tached less im­por­tance to eco­nomic growth, but in­stead shows the au­thor­i­ties are pay­ing greater at­ten­tion to high­qual­ity de­vel­op­ment, econ­o­mists said af­ter Premier Li Ke­qiang de­liv­ered the Gov­ern­ment Work Re­port to the open­ing of the third ses­sion of the 13th Na­tional Peo­ple’s Congress on Fri­day.

In the re­port, Li said China will not set a GDP growth tar­get for this year and will take a num­ber of force­ful fi­nan­cial mea­sures to shore up the econ­omy, which has been hit by the COVID-19 pan­demic.

Pres­i­dent Xi Jin­ping, who is also gen­eral sec­re­tary of the Com­mu­nist Party of China Cen­tral Com­mit­tee and chair­man of the Cen­tral Mil­i­tary Com­mis­sion, and other lead­ers at­tended the meet­ing at the Great Hall of the Peo­ple in Bei­jing.

Li ac­knowl­edged that the world’s sec­ond-largest econ­omy faces “dif­fi­cult fac­tors” and “un­cer­tain­ties” due to the spread of the novel coro­n­avirus, which has sharply re­duced global de­mand and se­ri­ously damp­ened eco­nomic ac­tiv­i­ties.

“We have not set a spe­cific tar­get for eco­nomic growth this year,” he 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.”

Sun Guo­jun, a se­nior of­fi­cial at the State Coun­cil Re­search Of­fice who par­tic­i­pated in the draft­ing of the Gov­ern­ment Work Re­port, said, “With­out a tar­get, it does not mean that eco­nomic growth is unim­por­tant or the gov­ern­ment will al­low the econ­omy to slide out of the proper range.”

The premier said the na­tion will fo­cus on “en­sur­ing sta­bil­ity on the six fronts and se­cu­rity in the six ar­eas” this year.

China’s pol­icy of “en­sur­ing sta­bil­ity on the six fronts” refers to em­ploy­ment, fi­nance, for­eign trade, for­eign in­vest­ment, do­mes­tic in­vest­ment, and mar­ket ex­pec­ta­tions.

The pol­icy of “se­cu­rity in the six ar­eas” means safe­guard­ing em­ploy­ment, peo­ple’s liveli­hoods, the de­vel­op­ment of mar­ket en­ti­ties, food and en­ergy se­cu­rity, the sta­ble oper­a­tion of in­dus­trial and sup­ply chains, and the smooth func­tion­ing of so­ci­ety.

By im­ple­ment­ing those poli­cies, “we will be able to keep the fun­da­men­tals of the econ­omy sta­ble”, Li said.

Zhang Ming, an econ­o­mist at the Chi­nese Academy of So­cial Sciences’ In­sti­tute of World Eco­nom­ics and Pol­i­tics, said that while no spe­cific tar­get for GDP growth has been set, the fo­cus on the “six fronts” and “six ar­eas” showed the top au­thor­i­ties have the worst-case sce­nario in mind as they work for the best re­sults.

The coun­try plans to cre­ate more than 9 mil­lion new ur­ban jobs, en­sure that the sur­veyed ur­ban un­em­ploy­ment rate is no more than 6 per­cent and main­tain con­sumer in­fla­tion at around 3.5 per­cent, ac­cord­ing to the Gov­ern­ment Work Re­port.

“Those in­di­ca­tor tar­gets all con­cern the con­crete as­pects of the econ­omy that have a di­rect bear­ing on the feel­ings of the pub­lic,” said Liu Zhiqin, a re­searcher with the Chongyang In­sti­tute for Fi­nan­cial Stud­ies at Ren­min Univer­sity of China.

“With the au­thor­i­ties con­cen­trat­ing on achiev­ing con­crete tasks in­stead of set­ting an over­all GDP growth tar­get this year, they can avoid ir­ra­tional pur­suit of GDP growth and shift the na­tion’s at­ten­tion to pur­suit of high-qual­ity and co­or­di­nated de­vel­op­ment.”

To en­sure those tasks are achieved, the premier said the coun­try will pur­sue a pru­dent mon­e­tary pol­icy in a more flex­i­ble and ap­pro­pri­ate way.

On the fis­cal front, the deficit-toGDP ra­tio this year is pro­jected at more than 3.6 per­cent, with a deficit in­crease of 1 tril­lion yuan ($140.6 bil­lion) over last year, Li said.

Taxes and fees will con­tinue to be cut to aid the cor­po­rate sec­tor and re­duc­tions in VAT rates and the share of em­ploy­ees’ ba­sic old-age in­sur­ance paid by en­ter­prises will also be con­tin­ued, he said.

The pay­ment of cor­po­rate in­come taxes by mi­cro-sized and small busi­nesses and self-em­ployed in­di­vid­u­als will be post­poned to next year, Li added.

“We ex­pect that these mea­sures will see ad­di­tional savings of more than 2.5 tril­lion yuan for en­ter­prises through­out the year,” he said.

China’s year-on-year GDP growth came in at 6.1 per­cent last year, con­tribut­ing to about 30 per­cent of the growth of the global econ­omy. But it slumped to neg­a­tive 6.8 per­cent year-on-year in the first quar­ter of this year due to the se­vere im­pact of the COVID-19 pan­demic.

Based on the mea­sures and tasks set out in the Gov­ern­ment Work Re­port, Liu from Ren­min Univer­sity es­ti­mated that China’s year-on-year GDP growth may be over 6 per­cent in the sec­ond half of the year and around 3 per­cent for the whole year.

SHEN HONG / XIN­HUA

Left: Premier Li Ke­qiang de­liv­ers the Gov­ern­ment Work Re­port at the an­nual meet­ing of China’s top leg­is­la­ture in Bei­jing on Fri­day.

FENG YONGBIN / CHINA DAILY

Above: For­eign diplo­mats at­tend the open­ing cer­e­mony of the third ses­sion of the 13th Na­tional Peo­ple’s Congress in the Great Hall of the Peo­ple in Bei­jing on Fri­day.

WANG JING / CHINA DAILY

Fi­nance Min­is­ter Liu Kun an­swers re­porters’ queries on­line af­ter the open­ing of the NPC ses­sion on Fri­day in Bei­jing.

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