This year’s “Two Sessions” meeting kicks off Thursday with a gathering of top political advisers to the ruling Communist Party. Then on Friday, the National People’s Congress — the country’s rubber-stamp parliament legislature — will meet. Premier Li Keqiang is also expected to set out some economic goals for 2020, as well as policies needed to achieve them.
The government’s response to the economic fallout from the virus so far has totaled just tens of billions of dollars — a fraction of the trillions of dollars that other countries have thrown at the pandemic.
Li’s report will be particularly notable this year because of the pandemic and the deterioration of the US-China relationship, wrote Iris Pang, chief economist for Greater China at ING, in a recent research note. It’s not even clear whether China will set a GDP growth target, as it has done every year for decades.
The economists added in a research note late last week that they expect Beijing to approve more government spending, though it remains to be seen how that will be done. Cash handouts, for example, would be important for households that don’t have a lot of disposable income, they said.
Pang said that helping small and medium businesses will also be key, since many job losses have been concentrated there.
Pang also said that Beijing could announce during the Two Sessions a stimulus package equivalent to roughly 4% to 6% of GDP, which would amount to about $560 billion to $840 billion.