Chinese Premier Li Keqiang told officials at all levels to ‘tighten their belts’ (Leo RAMIREZ)

Beijing (AFP) – China took the rare move of not setting an annual growth target this year after the coronavirus battered the world’s second-largest economy and ravaged global growth, Premier Li Keqiang said Friday.

Instead, given “great uncertainty” caused by the COVID-19 pandemic, Beijing will “give priority to stabilising employment and ensuring living standards”, he told the opening of the National People’s Congress.

He also announced that China’s fiscal deficit was expected to be over 3.6 percent of gross domestic product this year, with a deficit increase of one trillion yuan ($140 billion) over last year.

Another one trillion yuan of government bonds will be issued for COVID-19 control, he added, calling these “extraordinary measures for an unusual time”.

The two trillion yuan will be transferred in full to local governments, with the funds to be primarily used for ensuring employment, meeting basic living needs, and protecting market entities, said Li.

He also said governments at all levels should “tighten their belts”, and that all types of surplus, idle and carryover funds will be withdrawn and re-allocated, to be put to better use.

It is the first time in recent years that officials have decided not to issue a numerical growth target, which is typically seen as a signal of the resources leaders are willing to spend to shore up the economy.

Li said China is “keenly aware of the difficulties and problems” the country faces, with COVID-19 sending the world economy into recession.

Before the pandemic, China was expected to announce a growth target of around six percent this year, allowing it to meet its key political commitment of doubling gross domestic product from 2010 to 2020.

But with the COVID-19 shock causing economic growth to shrink 6.8 percent in the first quarter, and　with further damage on the cards, such a target was seen as no longer realistic.

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.