China promises funds to help economy, sets no growth target

BEIJING - China's top economic official on Friday promised higher spending to revive its coronavirus-battered economy and curb surging job losses and said Beijing would skip setting a growth target in order to focus on fighting the disease.

The battle against the virus “has not yet come to an end,” warned Premier Li Keqiang in a report to China's ceremonial legislature. He called on the country to “redouble our efforts” to revive the struggling economy.

China, where the pandemic began in December, was the first economy to reopen but is struggling to revive activity. Private sector analysts say as many as 30% of the country's 442 urban workers - or as many as 130 million people - lost jobs at least temporarily when the economy shut down to fight the virus and as many as 25 million jobs might be lost for good this year.

The government's budget deficit will swell by 1 trillion yuan ($140 billion) this year to help meet targets including creating 9 million new urban jobs, Li said. That is in line with expectations of higher spending but a fraction of the $1 trillion-plus economic relief 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.

Li said the ruling Communist Party set no growth target, usually a closely watched feature of government plans, due to the “great uncertainty” of the epidemic.

The world's second-largest economy contracted by 6.8% over a year earlier in the three months ending in March after factories, offices, travel and other businesses were shut down to fight the virus.

Factories and shops have reopened but consumer spending, the main engine of economic growth, is weak. Forecasters say China is likely to face a wave of politically volatile job losses later in the year due to weak U.S. and European demand for Chinese exports.

Li called on government officials to make progress in an array of areas including employment, trade, attracting foreign investment, meeting the public's basic living needs and ensuring the stability of industrial supply chains.

Li warned that ensuring economic growth was “of crucial significance” even though Beijing set no official target. He said pressure on employment has “risen significantly."

Beijing will give local governments 2 trillion yuan ($280 billion) to spend on preventing job losses, making sure the public basic needs are met and helping private companies survive, Li said.