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China to abandon growth target amid coronavirus woes
08-07-2020 16:37
China to abandon growth target amid coronavirus woes
China to abandon growth target amid coronavirus woes

China's economy is recovering pretty rapidly after a prolonged downturn. Prompt actions of the government as well as the recently introduced stimulus measures have significantly boosted the pace of recovery. Thus, many economists believe that the world’s second-largest economy will soon get on track.

Nevertheless, this year, the government has not set an annual growth target for the first time in a long time. The shift away from ambitious long-term government growth targets means that China is likely to stick to a new strategy for longer-term economic development. Besides, the country acknowledges the difficulties the economy has faced amid a pandemic. "I would like to point out that we have not set a specific target for economic growth this year. 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," Chinese Premier Li Keqiang said in the speech of the 19th party congress. While China does not rush to make any forecast, other world analysts have given their own assessment. For instance, the International Monetary Fund (IMF) forecast that this year, China’s economy would grow by 1.2%. GDP would expand by 2.3% while in the worst-case scenario, it would gain only 0.1%. Overall, the Chinese authorities, as well as world experts, are confident that at the end of the year, China’s economy will show strong results.

President Xi Jinping points out that the measures taken to revive the economy hit by the coronavirus-driven crisis are aimed at ensuring stable employment and welfare of the population, food and energy security, the stability of production and supply chains as well as improving market conditions. In addition, he assured the markets that the government would provide support for businesses at the expense of the state budget. 

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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