China boosts spending

May 23, 2020

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BEIJING: China’s second most important leader on Friday promised higher spending to revive its pandemic-stricken economy and curb surging job losses but avoided launching a massive stimulus on the scale of the United States or Japan.

Premier Li Keqiang told lawmakers that Beijing would set no economic growth target, usually a closely watched feature of government plans, in order to focus on fighting the outbreak. The virus battle has not yet come to an end, Li warned.

China has reported 83,000 virus cases and 4,634 deaths from the virus. It was the first country to shut down factories, shops and travel to fight the pandemic and the first to reopen in March but it is still struggling to revive activity.

Private sector analysts say as much as 30 per cent of the urban workforce, or as many as 130 million people, have lost their jobs at least temporarily. They say as many as 25m jobs might be lost for good this year.

Beijing will give local governments 2 trillion yuan ($280 billion) to spend on meeting goals including creating 9m new jobs, Li said. That is in line with expectations for higher spending but a fraction of the $1tr-plus stimulus packages launched or discussed by the United States, Japan and Europe.

These are extraordinary measures for an unusual time, the premier said in the nationally televised speech.

Published in Dawn, May 23rd, 2020