China has abandoned its practice of setting GDP targets due to uncertainty brought by the COVID19 pandemic. Chinese Premier Li Keqiang gave the remarks on Friday in China’s annual parliamentary meeting, delayed for two months because of the pandemic.
“I would like to point out that we have not set a specific target for economic growth this year,” Li said in a report. “This is because our country will face some factors that are difficult to predict in its development due to the great uncertainty regarding the COVID-19 pandemic and the world economic and trade environment,” Li said.
The premier emphasized the importance of maintaining jobs after China’s unemployment rates hit a record high. The country now targets an unemployment rate of 6%, up from last year’s 5.5%. The government eyes urban job creation of around 9 million jobs, down from 11 million in 2019.
“We will make every effort to stabilize and expand employment,” CNBC quoted Li. “We will strive to keep existing jobs secure, work actively to create new ones, and help unemployed people find work.”
Experts expected Li to share numerical GDP targets for another time other than 2020, given the current circumstances. Last year, the country’s GDP grew by 6.%, therefore putting the target range between 6% and 6.5%.
However, Bloomberg economists worry that China now has the challenge to guide expectations in the absence of GDP targets.
Setting a target in such an uncertain economic environment would have been risky. Abandoning the decades-long tradition relieves the government of the straight jacket the annual target placed on economic policy. The challenge will be to effectively guide expectations in the absence of the GDP targets,” Economists Chang Shu and David Qu say.