China has signaled it could miss its annual economic growth target as Covid restrictions weigh on the world’s second largest economy.
On Thursday, the Politburo – the ruling Communist Party’s top political decision-making body – said it aims to keep growth within “reasonable limits”.
There was no mention of the previously set official growth target of 5.5%.
China continues to pursue a zero-Covid policy, with major cities in full or partial lockdown.
In a statement after its quarterly economic meeting, the 25-member Politburo chaired by President Xi Jinping said leaders would “endeavour to achieve the best possible results”.
However, it also called on stronger provinces to work to meet their growth targets.
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Analysts said the lack of a GDP mention was notable, even though economists previously predicted China would struggle to meet its 5.5% target.
“The 5.5% growth target is no longer a must for China,” Iris Pang, chief China economist at ING Bank, told The Wall Street Journal.
They also added that China was urging larger provinces to balance those harder hit by the lockdown.
“Beijing has requested that provinces that are relatively well-positioned should strive to meet economic and social goals for this year,” Nomura analysts Ting Lu, Jing Wang and Harrington Zhang said in a note.
“We think Beijing is proposing GDP growth targets could be more flexible for provinces with less favorable conditions, particularly those hit hard by the Omicron variant and lockdowns.”
Earlier this month, China said its economy shrank sharply in the second quarter of this year.
Major Chinese cities, including the main financial and manufacturing hub of Shanghai, have been in full or partial lockdown during this period.
China’s once-booming real estate market is also in a deep slump, and home sales have fallen for 11 straight months.
Several Chinese developers have halted construction of homes already sold over cash flow concerns.
In recent weeks, some homebuyers have threatened not to pay their mortgages until work resumes.
In 2020, China made the rare decision to scrap its GDP targets in the face of the pandemic.
GDP measures the size of an economy. Measuring its expansion or contraction is one of the most important ways of measuring how well or poorly an economy is doing, and is closely watched by economists and central banks.
It also helps companies assess when to expand and hire more staff, or to invest less and downsize their workforce.
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