China scraps GDP target

BEIJING (AFP) — China took the rare move of not setting an annual growth target this year after the coronavirus battered the world’s second-largest economy and ravaged global growth, Premier Li Keqiang said Friday.

Instead, given “great uncertainty” caused by the COVID-19 pandemic, Beijing will “give priority to stabilizing employment and ensuring living standards”, he told the opening of the National People’s Congress.

He also announced that China’s fiscal deficit was expected to be over 3.6 percent of gross domestic product this year, with a deficit increase of one trillion yuan ($140 billion) over last year. Another one trillion yuan of government bonds will be issued for COVID-19 control, he added, calling these “extraordinary measures for an unusual time.”

The two trillion yuan will be transferred in full to local governments, with the funds to be primarily used for ensuring employment, meeting basic living needs, and protecting market entities, said Li.

He also said governments at all levels should “tighten their belts”, and that all types of surplus, idle and carryover funds will be withdrawn and re-allocated, to be put to better use.

Beijing will also issue another 3.75 trillion yuan ($526 billion) in special local government bonds this year in a bid to boost infrastructure spending in the virus-hit economy.

China has said it will tap its massive domestic consumer market to support the economy after external demand collapsed.