China signals it could miss economic growth target

Image source, Reuters

China may miss its economic growth target due to Covid restrictions.

The Politburo wants to keep growth within a reasonable range.

The growth target was not mentioned.

Major cities in China have been put into partial or full lock downs due to the zero- Covid policy.

The Politburo said in a statement that they would strive to achieve the best results.

Stronger provinces were urged to work to meet their growth targets.

Economists had predicted that it would be difficult for China to reach its 5.5% target despite the lack of a GDP mention.

According to the Wall Street Journal, the 5.5% growth target is no longer needed for China.

They said that China wanted larger provinces to make up for those that were more affected.

"Beijing requested that provinces which are relatively well-positioned should strive to achieve economic and social targets for this year," the analysts wrote.

Beijing is suggesting that GDP growth targets for provinces with less favorable conditions could be more flexible.

China said its economy had shrunk in the second quarter.

The major financial and manufacturing hub of Shanghai was put into full or partial lock down during this period.

Home sales in China have fallen for 11 months in a row.

Several Chinese developers have stopped the construction of homes because of concerns over cash flow.

Home buyers have been threatening to stop paying their mortgage until work restarts.

China scrapped its GDP targets in 2020 due to the swine flu.

The size of an economy is measured by GDP. Gauging its expansion or contraction is one of the most important ways of measuring how well or badly an economy is performing.

It helps businesses to decide when to increase or decrease their workforce.

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