Beijing Scraps GDP Target, Warns Of Rising Deficit

China refrained from setting a 2020 GDP growth target and pledged to step up spending and financing to support its economy, according to Premier Li Keqiang's work report released on Friday at the start of the annual parliament meeting.

Instead, given "great uncertainty" caused by the Covid-19 pandemic, Beijing will "give priority to stabilising employment and ensuring living standards", he said at the opening of the National People's Congress.

It marked the first time that China did not set a gross domestic product goal since 1990 when the government started to publish such targets.

Li said the government had set a budget deficit target for this year of "at least" 3.6 percent of GDP. The target compares with the 2.8 percent target set for 2019.

The mainland economy contracted 6.8 percent in the first quarter from a year earlier, shrinking for the first time in decades, as the outbreak of the new coronavirus paralysed production and hit spending.

Premier Li spoke at great length about the fight against the Covid-19 in his latest work report, describing the central government's measure of locking down Wuhan, the epicentre of the outbreak as a "victory”.

"The Covid-19 epidemic is the fastest spreading, most extensive and most challenging public health emergency China has encountered since the founding of the People’s Republic," his report said. "Under the strong leadership of the Central Committee of the Communist Party of China with Comrade Xi Jinping at its core , and through the hard work and sacrifice of our entire nation , we have made major strategic achievements in our response to covid 19 ,” his report said.

Looking ahead the report said priority will be to “stabilising employment and ensuring living standards, win the battle against poverty, and achieve the goal of building a moderate ly prosperous society in all aspects”.

(Additional reporting by Reuters, AFP)

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