Chinese president Xi Jinping and chief Li Keqiang, right, sing the national anthem at the opening of the National People’s Congress at the Great Hall of People on May 22, 2020 in Beijing, China.
Kevin Frayer | Photos of Getty
BEIJING – Chinese Premier Li Keqiang used a key meeting Thursday to highlight the opportunities China offers to these foreign businesses, in the wake of the coronavirus shock in the global economy.
His comments come as tensions between the United States and China continue to rise.
“We believe that all members of the global community should come together in a sense of cooperation to overcome the current poverty,”; Li said after the end of the annual Chinese parliamentary meeting, according to an official English translation of his speeches in Mandarin.
He reiterated whether China would open markets to more foreign businesses, and how Beijing and Washington should continue to find ways to work together, despite differences that have occurred.
“We all reject the notion of ‘cold war’ and the degeneration between the two major economies will not interfere with good and it will endanger the world as well,” Li said.
“I believe that economic cooperation and trade between our two countries should continue to follow the rules of business,” he said. “We must leave the decision to the market and to the business leaders.”
Highlights for this week’s National People’s Congress summit include discussions on economic and stimulus issues, and the passage of a new law in Hong Kong. The high level of the annual meeting is coming as China faces new challenges brought on by the coronavirus epidemic.
Li, the country’s second-in-command, spoke to reporters following the closing of the NPC ceremony, which usually takes place in March. This year, however, the conference has been postponed due to a virus outbreak.
One of the first major announcements at this year’s parliamentary meeting is that the world’s second-largest economy has not announced an annual GDP growth target for the first time in decades.
Li noted the unprecedented impact of the coronavirus epidemic, which first appeared last year in the city of Wuhan and has since infected more than 5.6 million people worldwide.
Instead, Chinese officials emphasized that jobs would prioritize and set a target unemployment rate of 6% for urban areas. Ensuring hundreds of millions of people have jobs – especially for a list of university graduates this year – is critical for social stability and growing in an economy that is set to rely more on domestic consumption.
Authorities also said they would remain focused on policy objectives such as poverty alleviation, supporting foreign investment in China and developing digital infrastructure, such as 5G.
Targeted unemployment is projected to grow by about 2% or 3% this year, according to Macquarie China Economist Larry Hu. China’s economy contracted 6.8% in the first quarter, and the unemployment rate reached a record high of 6.2% in February.
Hong Kong security law
Second, the Chinese central government has strengthened its control over the special administrative region of Hong Kong with a new security law aimed at anti-government demonstrators who have been on the streets for the last 12 months. What started as a peaceful protest over a controversial extradition proposal has become increasingly violent, severely disrupting business activity and contributing to Hong Kong’s first recession last year from the financial crisis.
The law would override the Hong Kong legislature, cutting off the former British colony’s ability to operate independently. Many worry that the law will also reduce the city’s attractiveness as an international finance and trading hub. Such concerns were publicly addressed by Chinese officials during a weekly parliamentary meeting.
On Wednesday, Secretary of State Mike Pompeo told Congress that Hong Kong was no longer independent of the Chinese central government. However, it is unclear what action the President Donald Trump administration can take in removing Hong Kong’s unique trading status in the United States that provides territorial benefits such as lower tariffs.
Less emphasis on GDP target
Third, China has taken a moderate stance on government stimulus, despite the growing coronavirus.
The country is slowly returning to work after more than half of the country extended its Lunar New Year holiday by at least a week in an effort to control the spread of the disease. As the scandal erupted domestically in mid-March, the virus spread abroad in a global pandemic and forced governments around the world to create similar locks and restrictions on business activity.
Covid-19 killed more than 4,600 people in China and more than 100,000 in the U.S. The worldwide death toll has exceeded 355,000 deaths worldwide.
Chinese Premier Li Keqiang wearing a mask spoke with staff as he visited the construction site where the new hospital was set up to treat patients with a new coronavirus, following the outbreak, outside Wuhan, China January 27, 2020.
cnsphoto by Reuters
This year, Chinese authorities say they will pursue “prudent” fiscal policy, while raising fiscal policy measures with an “over 3.6%” deficit-to-GDP ratio. In addition, China said it plans to issue 1.6 trillion yuan ($ 228.6 billion) more than last year on local government special bonds, for a total of 3.75 trillion yuan for 2020.
Central government spending is set to decline 0.2% this year, with an 11.8% drop to 54.3 billion yuan in foreign relations, national defense spending is still set to rise, to 6.6 % to 1.27 trillion yuan.
China is also planning to continue some economic measures that are boosting amid the outbreak of the coronavirus – such as reducing taxes and fees for smaller businesses, and encouraging banks to issue more loans. .
Officially reported, but highly skeptical, the growth rate for the world’s second largest economy has slowed in the last few years, amid concerns about the quality of growth and debt growth.
The removal of such a target this year suggests Beijing will not place too much pressure on local governments to achieve a certain figure of growth.
The Communist Party newspaper People’s Daily reported that President Xi Jinping said last week that coercive efforts to achieve a GDP growth target amid uncertainties created by coronavirus were not aligned. to the country’s economic and social goals.
“What we are looking for is good scientific development, a new concept of development,” he said, according to a CNBC translation of the Chinese text. “(We) seek the happy and good lives of the masses. In fact, when pursuing them, it can also gradually reduce a decline in domestic labor growth, but the focus will not be on GDP growth . “