China has dropped the mention of GDP goals. Moreover, the coronavirus has slammed hard to its economy. Read ahead to know more. Also, find out the stimulus packages the Chinese Government plans to launch.
The Economic Space
It is the first time that China has not set a target for GDP since the government began publishing such goals in 1990. Furthermore, the Chinese economy shrank 6.8% in the first quarter.
Investments, domestic consumptions, and exports are falling. Moreover, financial risks are mounting in the country. Moreover, the Chinese government targets to create 9 million jobs this year. It is the lowest since 2013. Last year, the country targeted 11 million jobs.
According to the BBC, China is planning security legislation for Hong Kong. Moreover, it will provide a sound legal system. However, Hong Kong will lose its autonomy if the law passes in the city.
Upcoming Fiscal Picture
China is targeting a 2020 budget deficit of at least 3.6% of GDP. Moreover, the government will issue 1 trillion Yuan in special treasury bonds this year. According to Reuters, the government will transfer 2 trillion Yuan raised from the bigger 2020 budget deficit.
The government is planning to use local government bonds to fund infrastructure projects. Also, special treasury bonds will be used to support firms and regions that are severely impacted by the coronavirus outbreak.
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China Stimulus Packages
The Chinese Government has announced a 4 trillion yuan fiscal stimulus package. Moreover, the country needs to have economic growth of around 3% to create 9 million new urban jobs.
Achieving the above figures will help China revive its economy as planned. Moreover, it will be able to resume its trade as well. The country will not perform to its best this year. But the stimulus package will save many business enterprises.
