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China will not set an economic growth target amid 'great uncertainty'

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Chinese Premier Li Keqiang told officials at all levels to'tighten their belts

China refrained from setting a 2020 GDP growth target and pledged to step up spending and financing to support its economy, according to Premier Li Keqiang's work report released on Friday at the start of the annual parliament meeting. Even in ordinary times, the meeting is as much symbolism as substance - a party-controlled vehicle to acclaim and approve laws and budgets by almost 3,000 delegates in neat rows under the vast ceiling of the Great Hall of the People.

By this week, the coronavirus outbreak had infected more than 89,000 people in China, including over 4,600 who died from the virus.

On the agenda are proposals to improve the country's disease surveillance system and hospitals, after the coronavirus outbreak exposed systematic failings.

Economists had said China needed to grow its economy by at least 5.5% to fulfill the mission of doubling the economy's overall size-a target that now appears to be out of reach in the absence of a broader reframing of the goals.

The implicit acknowledgment of sharply slower growth for 2020 marks a climbdown for leader Xi Jinping during a year when he was set to proclaim the end of absolute poverty in the country and double the economy's size from a decade earlier-political goals meant to burnish his standing ahead of next year's centennial of the Chinese Communist Party's founding. That is much smaller than the extra deficit spending being incurred in most industrialized countries. The one-year LPR rate is now 3.85%. A similar measure was withdrawn from Hong Kong's legislature in 2003 following massive public protests.

It will make further tax and fee cuts as well to help firms.

"That said, 6.6% growth is not insignificant and is perhaps multiples higher than expected GDP growth for the coming year", he said.

The numbers, announced each year at the opening of China's annual legislative meetings known as the Two Sessions, are closely watched as a barometer for how Beijing will expand its military capabilities.

Li made a clear effort to reassure domestic and foreign investors that China remains committed to its gradual evolution away from central planning toward a greater reliance on markets. "China will continue to boost economic and trade cooperation with other countries to deliver mutual benefits".

Despite disruptions from the pandemic, the Chinese market will remain the most noteworthy business environment in the world for a long time, as long as China maintains strong domestic demand and innovation momentum, said Hungchih Liu, vice president for Asia Pacific of engineering multinational AECOM.

Li's annual "work report" is China's answer to the U.S. "state of the union" address and comes with China still recovering from the COVID-19 outbreak that erupted on its soil, paralysing the world's second-biggest economy and sparking global criticism. But President Donald Trump said later in an interview that he is having "a very hard time with China" and last week said the US would "save $500 billion" if it cut off ties with China. Pressure on employment has "risen significantly", he said.

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