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Sino File | Coronavirus: China should stop unrealistic planning and start rescuing the economy
- Covid-19 has left China’s state planners scrambling to amend the delayed economic plan. Amid uncertainty about how long the pandemic will last, it makes more sense to work out a rescue plan than to set a unrealistic growth target
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Economic planning, like economic forecasting, is predicated on a certain degree of visibility, predictability and certainty of an economic outlook.
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This is why China’s state planners and macro managers are perplexed, confused and struggling to amend its delayed annual economic plan: never before has the economy been faced with such a great number of uncertainties, until the Covid-19 pandemic.
Usually, on or around March 5, the Chinese premier unveils the country’s annual economic plan in his presentation of the government work report to open the annual session of the National People’s Congress. But this year’s legislative gathering has been indefinitely postponed due to the coronavirus.
Beijing has not published its growth target for 2020. However, it was reported that the government had set a target of “around 6 per cent” growth in gross domestic product, which was agreed on by top party officials at the annual Central Economic Work Conference at the end of last year.
However, the outbreak of Covid-19 has upset the apple cart. Now, party leaders might have to revise down the growth target in response to the devastating impact of the epidemic, if they can even keep it at all.
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But the bigger challenge is that predicting and therefore planning the path ahead has become increasingly difficult, because of what is knowable and what remains unknowable. At this point, what planners can take into account is several likely scenarios for the Chinese economy.
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