China drops growth target, pledges spending to ease coronavirus impact
China was the first economy to reopen but is struggling to revive activity
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China is holding off on setting a growth target as it tries to revive its economy battered by the coronavirus.
China will instead put its focus on fighting the disease.
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A top Chinese economic official on Friday promised higher spending to boost the economy and curb surging job losses.
The battle against the virus “has not yet come to an end,” warned Premier Li Keqiang in a report to China’s ceremonial legislature. He called on the country to “redouble our efforts” to revive the struggling economy.
Chinese Premier Li Keqiang delivers the government work report during the opening session of China's National People's Congress (NPC) at the Great Hall of the People in Beijing, Friday, May 22, 2020. (AP Photo/Ng Han Guan, Pool)
China, where the pandemic began in December, was the first economy to reopen but is struggling to revive activity. Private sector analysts say as many as 30 percent of the country’s 442 urban workers — or as many as 130 million people — lost jobs at least temporarily when the economy shut down to fight the virus and as many as 25 million jobs might be lost for good this year.
The government’s budget deficit will swell by 1 trillion yuan ($140 billion) this year to help meet targets including creating 9 million new urban jobs, Li said. That is in line with expectations of higher spending but a fraction of the $1 trillion-plus economic relief packages launched or discussed by the United States, Japan and Europe.
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“These are extraordinary measures for an unusual time,” the premier said in the nationally televised speech.
Li said the ruling Communist Party set no growth target, usually a closely watched feature of government plans, due to the “great uncertainty” of the epidemic.
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The world’s second-largest economy contracted by 6.8 percent over a year earlier in the three months ending in March after factories, offices, travel and other businesses were shut down to fight the virus.
Forecasters say China is likely to face a wave of politically volatile job losses later in the year due to weak U.S. and European demand for Chinese exports.
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Beijing will give local governments 2 trillion yuan ($280 billion) to spend on preventing job losses, making sure the public basic needs are met and helping private companies survive, Li said.
The Associated Press contributed to this article.