No target for economic growth, with focus on fundamentals

In a rare move, China has not set a target for its economic growth rate this year. 

Instead of a forecast with specific figures, the nation may better focus its resources on stabilizing employment and safeguarding livelihoods amid the uncertainties caused in part by the COVID-19 pandemic.

In the annual government work report delivered yesterday at the third session of the 13th National People's Congress, Premier Li Keqiang categorically called “stabilizing employment and safeguarding livelihoods” a priority for this year.

Explaining why no target has been set for this year’s economic growth rate, Li said it was mainly due to uncertainties surrounding the global pandemic as well as economic and trade issues, under which China’s development would face certain hard-to-predict factors. 

Not setting a concrete target for the growth rate would enable all parties concerned to better concentrate on ensuring stability and security in key areas such as employment.

Stephen Perry, chairman of the 48 Group Club, said in a televised interview that it is scientific and sensible for China to recognize how complicated everything is, and not set targets. According to China Securities Journal, forecasting the rate of economic growth has been a general practice in the country since the 1990s.

While there’s no such a forecast this year, there have been a plenty of measures targeted at consolidating the economic fundamentals. 

After all, the economy is not just about how fast it grows or keeps growing; it’s about the health of the basics. It doesn’t matter if an economy grows at a slower speed sometimes. What matters is its capacity to corroborate the basics even in a less-speedy year.

Premier Li said China can stabilize the economic fundamentals so long as it meets the bottom lines in safeguarding basics in six areas, such as employment and livelihoods.

Li said more than 9 million new urban jobs should be created this year, with a surveyed unemployment rate of around 6 percent. Last year, there were more than 13 million new urban jobs, with a surveyed unemployment rate of less than 5.3 percent. Considering COVID-19’s impact on the global economy, this year’s forecast number of newly added jobs in cities and towns remains considerable and reflects the government's candid attitude in a changed context.

Aside from stabilizing employment, the government has thrown its weight behind a myriad of market entities, especially micro, small and medium-sized enterprises, by significantly reducing their burden of taxes and fees. Li said China will further reduce 2.5 trillion yuan (US$357 billion) worth of burdens for businesses this year. The benefit of reduced taxes and fees must go to the businesses, he said. 

“Keep the green mountains, and win the future," Li added.

In a popular Chinese saying, “green mountains” are regarded as a reservoir of woods, traditionally a source of energy. 

Li was alluding to keeping market players safe and sound to kindle the hope of sustainable growth in the future. Ultimately, market players that survive well will likely create more jobs,  helping stabilize employment.

“The government work report is oriented toward people’s livelihood,” said Lei Jun, head of Xiaomi. “Our premier won the most applause when he talked about stabilizing enterprises and ensuring employment, as well as support for micro, small and medium-sized businesses.”

Yao Yang, an expert on national development at Peking University, said yesterday that micro and small enterprises contribute about half of China’s urban employment, and are of particular importance when economic growth is less robust.

Support for businesses is more than helping them survive in a business sense only. Fundamentally speaking, these grassroots market entities are a dynamic source of innovation helping drive the economy forward.

In a State Council meeting on May 13, Premier Li called for respect for the original creative spirit of grassroots enterprises, and a better release of the vigor of market entities and the creative power of society.