May 22, 2020 09:43 PM

China Business Digest: China Ditches GDP Growth Target; Restrictions on International Flights Remain in Place

The annual meeting of China’s top legislature kicked off Friday after a two-month delay. As some had predicted, the government announced it would not set a GDP growth target for the year, the first time it has failed to do so since it began releasing such targets in 1994. Meanwhile, policy proposals submitted by high-profile businesspeople continue to make headlines with a real estate tycoon calling Beijing to roll out policies to encourage the development and use of construction robots.

— By Mo Yelin (yelinmo@caixin.com)

** TOP STORIES OF THE DAY

China extends restrictions on international flights

China’s civil aviation regulator said the March policy to limit the number of international flights will remain in place. Under the restrictions designed to contain the Covid-19 outbreak, each carrier can operate only one flight linking China and another country and can fly just once a week. Several foreign carriers applied to increase their flights into China but none has received approval, sources said.

Alibaba forecasts slower sales growth amid uncertainties

Chinese e-commerce giant Alibaba Group Holdings Ltd. forecast sales growth this year of at least 27.5% to more than 650 billion yuan ($91 billion), compared with 35% growth the previous year, reflecting uncertainties caused by the pandemic and China-U.S. frictions. The company posted a better-than-expected 22% rise in March quarter revenue of 114.3 billion yuan.

China ditches GDP growth target for 2020

China has abandoned a numerical GDP growth target for 2020, as the economy struggles to recover from the coronavirus crisis. Premier Li Keqiang announced the change in his yearly government work report delivered to the National People’s Congress (NPC), the country’s top legislature, during its annual session in Beijing on Friday.

However, Beijing did set other economic targets for the year. It set the target for this year’s fiscal deficit as a percentage of GDP at 3.6%, exceeding the level of 3% that has long been seen as a red line that some think shouldn’t be crossed, and significantly higher than last year’s target of 2.8%. The target for the surveyed urban unemployment rate will be around 6%, lower than 5.5% target in 2019.

Moguls pitch to policymakers

Throughout the annual “Two Sessions,” when the NPC and Chinese People’s Political Consultative Conference (CPPCC) meet, the Chinese media is flooded with reports of policy proposals made by businesspeople.

As China’s most important annual political event kicks into higher gear, some of such proposals making headlines include one from CPPCC member Yang Guoqiang, the president of one of China’s largest real estate developers, Country Garden. He proposed that China roll out policies (link in Chinese) to support the research and development of construction robots.

A proposal by executives at state-owned oil giant Sinopec, who are deputies to the NPC, urged policymakers (link in Chinese) to promote the development of hydrogen energy in China. Another Sinopec proposal (link in Chinese) called for greater investment in oil storage facilities and increasing crude oil stockpiles.

** ON THE CORONAVIRUS

CanSino’s vaccine candidate shows promise in early study

A Covid-19 vaccine developed by China’s CanSino Biologics showed signs of being safe and effective in an early study in humans, Bloomberg reported. The candidate vaccine stimulated production of both antibodies that can stop infection along with immune T-cells, according to the report. Further research is needed to show its effectiveness against the virus.

China reports four new infections

On Thursday, the Chinese mainland reported (link in Chinese) four new symptomatic coronavirus cases, with two locally transmitted cases in the hotspot of Jilin, and two imported ones in Sichuan, according to the National Health Commission. The country also added 35 new asymptomatic cases.

Globally, the infection rate has reached the grim milestone of 5 million, sitting at more than 5.1 million as of Friday morning Beijing time. The death toll had passed 333,000, according to data from Johns Hopkins University.

Other Virus News

• Recent research published by Princeton University in the journal Science showed that high temperatures may not curb the transmission of the coronavirus, ditching hope that its spread will slow with the coming of summer in the northern hemisphere.

** OTHER STORIES MAKING HEADLINES

• Embattled Chinese entrepreneur Jia Yueting, founder of numerous companies including electric-car startup Faraday Future, finally had his personal bankruptcy restructuring plan (link in Chinese) approved by a Californian court.

• Wan Weixing, chief scientist on China’s Mars exploration program, died (link in Chinese) at the age of 61 from an unspecified illness Wednesday in Beijing.

• Chinese smartphone-maker Xiaomi announced that it would pay $103 million to acquire a stake in portable battery charger developer Jiangsu Zimi Tech Co. Ltd., raising its total holding in the company to 49.9%.

• Cornerstone Capital, a Guangzhou-based private fund focusing on investing in U.S.-listed Chinese companies, was reprimanded (link in Chinese) by the local securities regulator for failing to disclose information to investors. Cornerstone filed a prospectus to list on the New York Stock Exchange in June 2018, but revised its IPO target down dramatically in October, and remains unlisted.

• Baofeng, the once-highflying Chinese online video service provider, risks being delisted in Shenzhen after failing to file its annual report on time.

** AND FINALLY

The Wuhan government is gearing up to compete its massive program to test all of the city’s residents for Covid-19. As of May 19, half of the city’s population of 11 million have been tested.

On May 20, Wuhan residents line up to be tested for Covid-19

Contact reporter Mo Yelin (yelinmo@caixin.com) and editors Flynn Murphy (flynnmurphy@caixin.com) and Joshua Dummer (joshuadummer@caixin.com)

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