BEIJING (BLOOMBERG) – China’s top leaders told government officials last week that this year’s economic growth target of “around 5.5 per cent” should serve as guidance rather than a hard target that must be hit, according to people familiar with the matter.

Leaders held meetings with ministerial- and provincial-level officials last week, during which they were told the target will not be used to evaluate their performance and there will not be penalties for failing to achieve it, according to the people, who asked not to be identified because they were not authorised to discuss the matter publicly.

The leaders also acknowledged that the chances of meeting the target were slim, the sources said.

The meetings came the same week as a key gathering of the Politburo, the Communist Party’s top decision-making body, to discuss the economy.

An official statement from that meeting did not refer explicitly to the GDP target, only calling for the “best outcome” possible for economic growth while sticking to a strict Covid-19-zero policy.

Leaders told government officials last week that provincial growth targets can also be downplayed, although the local authorities are still expected to pay every effort to stabilise the economy and contain coronavirus outbreaks, according to the people.

The State Council Information Office and the National Development and Reform Commission did not immediately respond to faxes seeking comment.

The national GDP target of around 5.5 per cent was announced in March, before a spike in Covid-19 infections led major cities including Shenzhen and Shanghai to lock down their populations to curb the outbreaks.

Economists have been warning for months that the growth goal would be unattainable this year, predicting that growth will come in at 4 per cent or lower.

Beijing has never missed its GDP target by such a large magnitude before. The government did not set a target in 2020, during the first wave of the coronavirus outbreak, and only missed it slightly by 0.2 percentage point in 1998.

Chinese leaders have recently been lowering expectations of meeting the GDP goal. President Xi Jinping in June said the authorities “would rather temporarily affect a little economic development” than risk the lives and health of people, as he vowed to press ahead with the Covid-19-zero policy.

Premier Li Keqiang last month signalled flexibility on the official target, saying that the most important thing is to keep employment and prices stable.