Since the Great Recession that stemmed from the 2008 financial crisis, China and India have contributed to much of the world’s economic growth.
Now, activity in both countries has plunged, raising the risk of a prolonged global slump, as China said Friday that it could not establish a target for economic growth this year based on the widespread uncertainty the coronavirus pandemic has caused to the world’s second largest economy.
“I would like to emphasize that we have not set a specific target for economic growth this year,” said Chinese Premier Li Keqiang in his annual policy address at the National People’s Congress session on Friday in Beijing.
“It is because our country will face certain factors that are difficult to predict in its development due to the great uncertainty regarding the Covid-19 pandemic and the global economic and business environment.”
In the same address, the Chinese premier also promised to put in place “enforcement mechanisms” on Hong Kong and Macau to prevent acts that endanger national security.
“We will fully and faithfully implement the policy of “One Country, Two Systems,” under which the people of Hong Kong govern Hong Kong and the people of Macao govern Macao, with a high degree of autonomy for both regions,” Li Kequiang said.
Hong Kong’s Hang Seng Index lost nearly 6% on Friday amid the news.
“Emerging market currencies have been among the biggest market casualties of the Covid-19 outbreak as their generally weaker home economies have seen cash flow out as investor risk-aversion rises. However, while their fortunes have differed, it’s very difficult to see them thriving in aftermath which promises plenty of headwinds,” Daily FX analyst David Cottle noted. “The Mexican Peso will serve as a pretty good exemplar of the process so far. It has understandably fallen sharply against anti-risk plays such as the US Dollar as the crisis has developed and shows little sign of clawing back much-lost ground.”