The world’s second-largest economy is on track for its worst performance in the post-Mao era, as the impact of shutdowns to curb the disease outbreak at home is compounded by a slump in global demand as the pandemic spreads. That has left the leadership with the choice of setting an uncomfortably low growth target, an unrealistically high one, or skipping it altogether.
Such a move would free up policy makers from the obligation to issue significant stimulus to meet a certain growth level as long as employment remains stable. While China has announced credit easing policies, tax breaks and additional spending plans, the efforts are still targeted and more moderate compared with other major economies. The leadership’s caution is driven by fears of another debt blowout after total borrowing ballooned after the global financial crisis.
Full-year economic growth will likely slow to 1.8%, according to the median estimate of economists surveyed by Bloomberg. It’d be the first time for Chinese leaders not to issue a numerical growth target in at least two decades.
The State Council Information Office referred questions on the growth target to the National Development and Reform Commission, which did not immediately respond to a request for comment. The State Council typically leads the drafting of the work report.