China takes decisive move amid risks
Govt Work Report outlines challenges, offers blueprint to secure virus-hit economy
China on Friday offered the most comprehensive and pragmatic assessment of the extraordinary circumstances for the country’s social and economic development created by the COVID-19 pandemic, and made rare, decisive adjustments in a wide range of areas amid lingering risks.
This year’s Government Work Report, one of the closelywatched documents in China that sets the agenda for social and economic policies for the year, was distinct in form and substance, befitting a particularly trying time for the country not seen in over four decades.
Among the most significant changes is a decision to end a tradition that has lasted over 25 years to set a specific growth target, underscoring the uncertainty ahead for the economy.
But in spite of those sobering realties, China remained unwavering in reaching its long-standing broader development goals of eradicating absolute poverty, and the report offered a robust blueprint for a steady recovery in the world’s most populous country with dozens of targeted policy measures centered on pressing issues such as jobs and living conditions. If properly executed, the plan will be sufficient to bring the country back on the right track ahead of other major economies, analysts said on Friday.
The extraordinary circumstances for the country were palpable when Premier Li Keqiang delivered the report at the opening of the annual session of the National People’s Congress (NPC), China’s top legislature, on Friday morning after over two months of delay due to the epidemic.
“The epidemic has not yet come to an end, while the tasks we face in promoting development are immense,” Li said at the start of his speech, before offering a more detailed evaluation of the challenges and progress made over the past several months in epidemic control and economic relief. He declared a “decisive victory” in the battle against the virus, but acknowledged the “great price” China has paid, which he stressed as “a price worth paying.”
“We did not set a specific target, but that does not mean economic growth is not important or we will allow the economy to fall freely,” Liu Rihong, an official at the State Council who participated in drafting the report, told reporters.
Commenting on the feasibility of the GDP growth target, He Lifeng, head of the National Development and Reform Commission, the top economic planner, said that even a one-percent GDP growth in 2020 would mean 1.9 times the 2010 GDP, while a three-percent growth mean 1.95 times and a five-percent growth mean 1.99 times – “all very close to the expected target.”
Among the major policy moves in the report is a decision to raise the deficit-to-GDP ratio above 3.6 percent, with a deficit increase of one trillion yuan from last year. China will issue one trillion yuan in government bonds for COVID-19 control.
The report stated that the two trillion yuan will be transferred to local governments and a mechanism will be set up to ensure that funds will reach county governments to directly benefit businesses and people. “The deepest feeling is a boost to the confidence of entrepreneurs,” said Zhang Jindong, an NPC deputy and chairman of the Chinese appliance retailer Suning. “Although the pressure is unprecedented… we are confident that we will overcome difficulties.”
However, preventing a second wave of the pandemic would be key, experts said.
“Good epidemic prevention and control work is essential to ensure economic recovery and growth. We need to restart economic activities amid the normalization of epidemic prevention,” said Wang Hongwei, a professor at Renmin University of China’s School of Public Administration and Policy.
The third session of the 13th National People’s Congress (NPC) opens at the Great Hall of the People in Beijing, capital of China on Friday. Leaders of the Communist Party of China (CPC) and the state, Xi Jinping, Li Keqiang, Wang Yang, Wang Huning, Zhao Leji, Han Zheng and Wang Qishan on Friday attended the opening meeting of the third session of the 13th NPC, with Li Zhanshu presiding over the meeting.