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China drops economic growth target due to Covid restrictions

CHINA’S leaders have effectively acknowledged that the struggling economy will fail to hit its official 5.5 per cent growth target this year after strict anti-coronavirus measures disrupted manufacturing and trade.

Thursday’s announcement, which followed a Communist Party planning meeting, reflected the high cost that President Xi Jinping’s government has been willing to incur to contain the virus.

The party promised to “strive to achieve the best results” in the second half of the year.

Its statement did not directly address the growth goal but, unlike earlier statements, made no reference to targets, effectively acknowledging the economy will fall short after growing in the first half by just 2.5 per cent from a year ago.

Retail sales, a major driver of growth, were down 0.7 per cent in the first half from a year earlier after plunging by 11 per cent in April following the temporary shutdown of Shanghai and some other major cities to fight virus outbreaks.

Party leaders promised to “actively act in expanding demand” and to make up for the low level of consumer and business spending.


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