Highlights of China’s 2020 economic targets


  • China
  • Friday, 22 May 2020

Chinese President Xi Jinping and Premier Li Keqiang arrive at the opening session of the National People's Congress (NPC) at the Great Hall of the People in Beijing, China May 22, 2020. REUTERS/Carlos Garcia Rawlins

BEIJING: Economic fallout from the coronavirus pandemic caused China’s government to avoid setting a formal GDP growth forecast for this year, while predicting a swelling budget deficit and setting a more modest target for employment expansion.

Every year, the State Council, the National Development and Reform Commission and the Ministry of Finance release reports before the NPC opening ceremony.

This year’s annual meeting, which was delayed by more than two months due to the coronavirus outbreak, will last for about a week and conclude on May 28.

CHINA PREVIEW: NPC to Move Away From Simplistic Growth Goal

Key economic targets from the reports include:

Fiscal budget

Deficit ratio at more than 3.6% of GDP -- a more than 10-year high -- versus 2.8% target in 2019.

Employment

Add more than 9 million new urban jobs, down from the 11 million target in 2019

Surveyed urban unemployment rate of around 6%, versus 5.5% target in 2019

Monetary and fiscal policy

Reiterates prudent monetary policy to be more flexible and appropriate

Reiterates plan to maintain ample liquidity via reserve requirement ratio and interest rates cuts, re-lending

To renovate monetary policy tools to better serve economy

To guide money supply significantly higher than 2019

Reiterates more proactive fiscal policy

Further cut taxes and fees by about 500 billion yuan. Extend existing policies due to expire by June to end of year. These measures are expected to save more than 2.5 trillion yuan for companies through 2020

Bond issuance

Plans to sell 1t yuan of anti-virus government bonds

Plans to sell 3.75t yuan of special local government bonds

Support financial institutions to issue 300b yuan of bonds to fund lending to small businesses

Trade

Pledges to implement U.S. trade deal

Targets more stable, high-quality imports and exports

Other targets, overarching policy goals:

Defense spending to rise 6.6% to 1.268t yuan, the slowest pace of increase since 1991

Extend loan relief to smaller businesses to March 2021

Stick to "one country, two systems” for Hong Kong governing, and refine system to safeguard national security in Hong Kong

Plans 600b yuan of central government budgetary investment

To keep yuan stable at reasonable and equilibrium level

Reiterates homes are for living in, not for speculation

Build more charging facilities, promote new energy vehicle developmentExpand 5G applications. - Bloomberg

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