Coronavirus: China should drop 2020 GDP target as pandemic stokes uncertainty, says central bank adviser

Central bank adviser Ma Jun says China should not set an economic growth target this year due to damage caused by the coronavirus pandemic

Even GDP growth of between 4-5 per cent will be difficult as the pandemic spreads in the US and Europe, Ma says

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China’s economy went into free fall during the first two months of the year, stoking fears of a contraction in the first quarter of 2020. Photo: AP

Published: 7:30pm, 31 Mar 2020Updated: 9:31pm, 31 Mar 2020

A prominent adviser to China’s central bank has suggested the government drop a specific growth target for 2020 as the coronavirus outbreak has caused unprecedented damage to the economy, shedding light on the deep divide over policy in Beijing.

“China can hardly achieve the 6 per cent target because of the coronavirus pandemic,” Ma Jun, an academic member of the People’s Bank of China’s monetary policy committee, told the state-owned Economic Daily.

“It is also hard to maintain 4-5 per cent growth … because it will largely depend on how the pandemic develops in Europe and the United States.”

Debate over whether China should set a growth target this year has been getting louder among Chinese policy advisers in recent weeks, especially after production and investment went into free fall during the first two months of the year, stoking fears of a contraction in the first quarter of 2020.

It is also hard to maintain 4-5 per cent growth … because it will largely depend on how the pandemic develops in Europe and the United States

Ma Jun

While China’s official purchasing managers’ indices – a survey of sentiment among factory owners and service sector firms in the world’s second largest economy – showed strong rebounds on Tuesday, the national statistics agency said they were in no way an indication that the world’s second biggest economy had returned to normal.

President Xi Jinping has said China is still committed to its “economic and social development goals” and grand vision of building a “comprehensively well-off society” this year, which includes doubling gross domestic product (GDP) in the decade to 2020. That would require a minimum growth rate of about 5.6 per cent, analysts say.

But pursuing a high pace of economic expansion would “kidnap macroeconomic policies and eventually force the use of an all-out stimulus,” Ma said.