China will try hard to achieve the best possible results for the economy this year, state media said on Thursday after a high-level meeting of the ruling Communist Party, dropping previous calls that it will strive to meet its 2022 growth target.

In the second half, China should “stabilise employment and prices, maintain economic operations within a reasonable range, and strive to achieve the best possible results,” Xinhua news agency reported, after the 25-member Politburo chaired by President Xi Jinping met to assess the economy.

The world’s second-largest economy narrowly avoided contracting in the second quarter due to widespread Covid-19 lockdowns. Analysts said Beijing’s full-year growth target of around 5.5 percent had been looking increasingly unattainable. China last missed its growth target in 2015.

First-half gross domestic product grew only 2.5 percent from a year earlier, pointing to huge pressure in the second half, amid fears of a global recession, uncertainties from the Ukraine war and worries of recurring Covid lockdowns. 

After an April Politburo meeting, state media reported that China will “work hard to realise the annual economic and social development targets.”

On June 22, Xi, at the opening of a BRICS forum, said China would take more measures to achieve its annual economic goals while minimising the impact of its Covid-19 prevention and control measures as much as possible.

But during an inspection tour in the central city of Wuhan on June 28, Xi said China will “strive to reach a relatively good level of the economic development this year”.

Similarly, last week, Premier Li Keqiang said at the World Economic Forum China will “strive for relatively good results in economic development for the whole year”.

Xinhua said on Thursday that large provinces must take lead in growing China’s economy, and those in a position to achieve their economic goals should do so.

“The upshot is that the Politburo meeting reinforces our view that stimulus will remain relatively restrained this year and that the economy will continue to operate well below potential over the coming quarters,” said Julian Evans-Pritchard, senior China economist at Capital Economics.

Full-year GDP growth is expected to reach 4.0 percent, according to a Reuters poll of economists this month.

To stabilise the economy, authorities have deepened tax credit rebates, accelerated local government special bond issuances to buoy infrastructure investments, and lowered car purchase taxes.

The economic pressures coincide with a once-in-five-years Communist Party Congress this autumn, where Xi is expected to secure a precedent-breaking third leadership term.

While much of the rest of the world has been trying to live with the virus, Xinhua reported after the Politburo meeting that China would stick to the “dynamic zero- Covid” policy.

“Persistence is victory,” Xinhua said.

Stabilising property

With China’s property market lurching from one crisis to another, developers being short on liquidity and laden with debt, and buyers launching nationwide mortgage boycotts, the country’s top leaders vowed to stabilise the real estate and financial sectors.

Local governments must ensure the delivery of property projects, should properly resolve risks of some rural banks, and crack down on financial crimes, Xinhua reported.

The property market poses huge risks to China’s economy systematically, said Liu Ligang, Asia-Pacific head of economic analysis at Citi Global Wealth Management.

“The Politburo asked local governments to ensure the delivery of houses, but if major property developers defaulted generally, I am afraid it is not a problem that local governments can resolve,” Liu said.

“It may become a nationwide problem which will impact the country’s financial system severely.”