China abandons GDP growth target, to enhance stimulus measures

SINGAPORE (ICIS)–China has decided not to set a GDP growth target for this year and is focusing on higher spending and more stimulus to support the economy, Premier Ki Keqiang said in his government report on Friday.

This is the first time the country omitted a GDP goal since 1990.

Not setting a specific target for economic growth will enable all of China to concentrate on ensuring stability on other aspects, Li said.

Priorities would be on stabilising employment, ensuring living standards, winning the battle against poverty as well as building a moderately prosperous society in all aspects, he said.

In the first quarter, Chinese economy contracted 6.8% amid the coronavirus outbreak, the first shrink almost three decades.

The deficit-to-GDP ratio this year is projected at more than 3.6%, up from 2.8% in 2019.  It sets consumer price index (CPI) increase of around 3.5%.

Stimulus plans, especially tax cuts, will be implemented to spur growth.  The reduction on enterprises’ tax and fees burdens are estimated to exceed yuan (CNY) 2,500bn, the highest in history.

China’s National People’s Congress (NPC),the top legislature, usually holds its annual session in March. The session was postponed by more than two months by the coronavirus pandemic.

Li called on the country to redouble efforts to minimise losses from the pandemic and fulfill the targets and tasks for economic and social development.