China makes first target growth economy by removing corona crisis

For the first time since China sets targets for economic growth, lets the country release. And that is a step where the Netherlands as an export country possibly the consequences will encounter.

Since 1990 the Chinese government publishes annual targets for economic growth. To that used Premier Li Keqiang end today. He did so at the opening of the National People’s Congress.

This event puts the top of the Communist Party’s political course of President Xi Jinping off. Typically, the parliament approves it then it without much debate.

unpredictable factors

“We have no specific economic goal this year, mainly because of the global epidemic and because the economic and trade conditions are highly uncertain,” said Li according to Reuters. “The development of China depends on unpredictable factors.”

“China recognizes that it is hit, like all of us,” said Durk Veenstra, stock market commentator for RTL Z. “China has something to prove, because the target for this year was 5.5 per cent growth, which is of course not are. Then you can target better release to fail not, they think. ”

imago Jinping

Fail is crucial for the image of President Jinping, who promised that this year would be an end to poverty in the country and that would have doubled the economy suffered over a decade. By achieving these goals, the president wanted the centennial of the Communist Party put glory next year, Wall Street Journal writes.

That these targets are weakened now, may also have implications for the Dutch economy, says Veenstra. “It may also mean that China is not going to pull out all the financial stops to get the promised growth.” Less Chinese aid means less demand, also for European products.

“Whole world benefited ‘

“In the last recession benefited the world of a huge stimulus program China. And it caused a rapid recovery here. It is therefore perhaps not happen,” Veenstra explained.

China shifts the focus from growth to maintain employment, adds Jan Wirken, an analyst at ABN Amro increases. This year there are 9 million jobs, the government expects. That’s 2 million less than expected last year.

First contraction in decades

In the first quarter of this year China’s economy shrank by the outbreak of coronavirus with a staggering 6.8 percent compared to the same quarter. That the economy controlled by the state shrank, for the first time in decades.

The crisis has also affected the budget of the government. The budget deficit will amount to “at least 3.6 percent,” Li said. Last year, that figure was 2.8 percent.

China raises the ceiling for debts that may affect local governments by issuing special bonds to almost 500 billion euros. The land itself will spend 130 billion euros of bonds.

assistance for entrepreneurs

The business is supported by reducing taxes totaling 325 billion euros this year. Until March next year companies get further delay to repay loans and interest.

Li also said China along with the United States is working to implement the trade agreement concluded previously. Talks with Japan and South Korea are still ongoing. China wants to play a major role in the reform of the World Trade Organization (WTO).

Thus corona helps strengthen China’s power in the West

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