China takes de­ci­sive move amid risks

Govt Work Re­port out­lines chal­lenges, of­fers blue­print to se­cure virus-hit econ­omy

Global Times - Weekend - - FRONT PAGE - By Wang Cong and Xie Went­ing

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.

Ex­tra­or­di­nary times

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.”

Tar­geted mea­sures

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.

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