Coronavirus hits China economy
CHINA is preparing steps to adjust to a slower rate of economic growth as coronavirus shows few signs of abating.
Officials are evaluating whether to soften the economic-growth target for 2020, while State-owned liquefied natural gas importers are considering declaring themselves unable to fulfill some obligations on cargo deliveries — known as force majeure — according to people familiar with the matter.
And authorities in Beijing are hoping the US will agree to some flexibility on pledges in their phase-one trade deal, people close to the situation said.
Two-thirds of the Chinese economy will remain closed this week as several provinces took the extraordinary step of extending the Lunar New Year holiday to help curb the spread of the disease that’s claimed more than 360 lives, with confirmed cases reaching almost 17 400.
The annual growth target is typically unveiled in March at the country’s legislative session after being endorsed by top leaders at the yearly closed-door Central Economic Work Conference in December. Economists had expected China would aim for output growth of “around 6 percent” this year after seeking a range of 6 percent to 6,5 percent in 2019.
Bloomberg Economics reckons growth could dip to 4,5 percent in the current quarter.
Officials are also considering further measures to shore up the economy, including selling more special government bonds, said the people, who asked not to be identified discussing the private talks.
They also could increase the planned cap on the ratio of the budget deficit to gross domestic product, they said.
This year’s legislative gathering, which is scheduled to begin March 5, could be delayed as the epidemic disrupts work across the country.
China’s State Council Information Office didn’t immediately respond to a request for comment.
Any changes to the growth target would have to be approved by top leaders of the Communist Party.