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Two Sessions: No specific GDP target to be set for 2020

Beijing will not set a specific economic growth target or range for 2020, as “great uncertainties hover above the global (COVID-19) pandemic, economic and trade circumstances, and (as a result), our economy is facing with some unpredictable factors”,China’s Premier Li Keqiang disclosed in Beijing on May 22 when presenting the annual government work report.

Not to set the GDP target will enable the Chinese government to focus on stabilizing employment, finance, foreign trade, foreign investment, domestic investment and market expectations, he shared when presenting at the third session of the 13th National People's Congress (NPC) on Friday morning.

To cushion the national economy against the blow by the COVID-19, China will raise the government budget deficit ratio to over 3.6% or Yuan 1 trillion ($140.5 billion) more than a year ago, according to Li.

Together with the added Yuan 1 trillion government budget, Beijing will issue Yuan 1 trillion special government bonds specifically to aid the fight against the pandemic, mainly to provide financial aids to enterprises or citizens, he clarified.

To stabilize the national economy in 2020, China’s central government will also roll out a series of measures including adopting more active fiscal policies, cutting enterprise taxation, reducing financing costs, and for the whole 2020, China will reduce enterprises’ taxes and fees to reduce their burden by an estimated Yuan 2.5 trillion in total, according to Li.

Besides, Beijing will raise the quota of the local government bond issuance for specific use to Yuan 3.75 trillion, or Yuan 1.6 trillion higher on year, and among the total, a higher proportion will be allowed to fund projects, according to the report.

An official from an Indian consultancy house, however, expressed “a bit disappointment” at China’s stimulating efforts disclosed on May 22.

“We had expected a GDP target, a higher deficit ratio at 4%, higher government bonds,” he shared.

So far in 2020, China’s domestic economy has faced unprecedented challenges, as the GDP for the first quarter of 2020 declined 6.8% on year, or the first time since the country’s National Bureau of Statistics released the quarterly economic growth since 1992, or a sharp contrast to the 6.1% on-year GDP growth for 2019, as reported.

The annual NPC session, starting May 22, will close on May 28 and the other of the “two sessions”, the annual meeting of the 13th Chinese People's Political Consultative Conference (CPPCC) will end on May 27 with the same duration as it opened on May 21.

The final version of the government work report is usually available upon the approval at the closing meeting of annual NPC session.

Written by Olivia Zhang, zhangwd@mysteel.com

Edited by Hongmei Li, li.hongmei@mysteel.com