You are here: Home » International » News » Economy
In call with Biden, Xi warns against 'playing with fire' over Taiwan
Mastercard warns of inflation pinch after solid quarter for card issuers
Business Standard

China backs away from goal of 5.5% GDP growth, sticks to Covid controls

A Communist Party planning meeting reflected the high cost President Xi Jinping's government has been willing to incur to stop the virus in a politically sensitive year

Topics
China | China GDP growth | Xi Jinping

AP  |  Beijing 



China, China economy, Economy
Policymakers implicitly walked back from the original growth target, said Larry Hu of Macquarie Group in a report. It means that they no longer view 5.5%, or even 5%, as achievable for this year.

China's leaders effectively acknowledged the struggling won't hit its official 5.5% growth target this year and said Thursday they will try to prop up sagging consumer demand but will stick to strict anti-COVID-19 tactics that disrupted manufacturing and trade.

The announcement after a Communist Party planning meeting reflected the high cost President Xi Jinping's government has been willing to incur to stop the virus in a politically sensitive year when Xi is widely expected to try to extend his term in power.

The party promised to strive to achieve the best results in the second half. It didn't directly address the growth goal but dropped references in earlier statements about targets, effectively acknowledging the will fall short after growing just 2.5% over a year ago in the first half.

Policymakers implicitly walked back from the original growth target, said Larry Hu of Macquarie Group in a report. It means that they no longer view 5.5%, or even 5%, as achievable for this year.

Party leaders promised to actively act in expanding demand and to make up for lack of consumer and business spending.

Retails sales, a major driver of growth, were off 0.7% from a year earlier in the first half after plunging 11% in April following the temporary shutdown of Shanghai and some other major cities to fight virus outbreaks.

Thursday's statement affirmed support for the anti-COVID-19 strategy despite its rising economic cost and social disruption.

We should resolutely and conscientiously implement the policies and measures for the prevention and control of COVID-19," the statement said. We should do a good job in tracking virus mutations and developing new vaccines and drugs.

Forecasters don't expect Beijing to ease anti-virus controls until at least after a ruling party congress in October or November, when Xi is expected to try to break with tradition and award himself a third five-year term as party leader.

rebounded quickly from the pandemic in 2020, but activity weakened as the government tightened controls on use of debt by its vast real estate industry, which supports millions of jobs. Economic growth slid due to a slump in construction and housing sales.

Repeated shutdowns and uncertainty about business conditions have devastated entrepreneurs who generate China's new wealth and jobs. Small retailers and restaurants have closed. Others say they are struggling to stay afloat.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)


Subscribe to Business Standard Premium

Exclusive Stories, Curated Newsletters, 26 years of Archives, E-paper, and more!

Insightful news, sharp views, newsletters, e-paper, and more! Unlock incisive commentary only on Business Standard.

Download the Business Standard App for latest Business News and Market News .

First Published: Thu, July 28 2022. 22:14 IST

RECOMMENDED FOR YOU

.