Chinese Premier Li Keqiang celebrated friday “A major strategic success” in his country’s fight against the new coronavirus, appeared at the end of 2019 in Wuhan (center).
“We, sons and daughters of the Chinese nation, have stood together during an infinitely difficult period and have erected a Great Wall of Solidarity”, said Mr. Li in a solemn speech at the opening of the annual session of parliament.
Countries shut down at the end of January
After practically putting the country to a halt in late January in response to the epidemic, Beijing has managed to curb the contagion considerably, falling in recent weeks to a few new cases per day.
The pandemic has meanwhile spread to the surface of the globe.
“We obtained a decisive victory in the defense of Hubei province and its capital, Wuhan”, quarantined for two and a half months, said the head of government.
” High price “
The number two of the communist regime however stressed “The immense task” that there was still work to be done in the face of the economic consequences of the epidemic. “We must redouble our efforts to minimize losses”, he launched to the deputies.
“Our success has come at a high price. It was a price that had to be paid and that was worth it “, he said, referring to the plunge in gross domestic product in the first quarter.
“The pressure on employment has increased sharply”, he recognized.
Country renounces growth target
China will not set a growth target this year, an unprecedented upheaval for the Asian giant. “Our country will face certain factors that are difficult to predict” because of the Covid-19 pandemic and global economic conditions, said Li Keqiang.
China has largely contained the epidemic on its territory and movement restrictions are gradually being lifted. But the consequences of the virus on its economy are bound to last.
The country will drop its deficit this year to 3.6% of GDP (compared to 2.8% last year), thus putting a brake on its debt reduction policy to support a suffering economy. The country’s deficit will thus increase by 1 trillion yuan (128 billion euros) over the previous year, said Li.
China has not had a budget surplus since 2007.
State loan
The Chinese Premier also announced the issuance of a state loan in the amount of 1,000 billion yuan.
“This is an exceptional measure limited to (an) exceptional period”said Li Keqiang, adding that the total of 2 trillion yuan would be “Transferred in full” to local governments to support employment.
Beijing also intends to rebalance its economy towards domestic consumption, at a time when the pandemic paralyzes its main trading partners, the European Union and the United States, and penalizes exports, a key sector for the Asian giant.
18 million jobs lost
Nomura Bank, particularly pessimistic, expects 18 million jobs cut in the export field in China – nearly a third of the workforce in a sector essential to its economy.
The unemployment rate in China, which was closely watched by the government, stood at 6% in April, close to the all-time high of 6.2% in February.
However, this figure only reflects the situation in urban areas and de facto excludes the millions of migrant workers, weakened by the pandemic.
An explosion in unemployment could also hit consumers hard, which Beijing is counting on to revive its economy.
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