It’s been almost eight weeks since the Chinese government shut down Wuhan, the city at the center of the COVID-19 epidemic. The epidemic seems to be finally under control, at least in the Chinese mainland, and the business, which has been almost completely dormant, is slowly beginning to awaken.

President Xi Jinping’s visit to Wuhan on March 10th made this event an opportune moment to consider the economic impact of the Chinese economic downturn, what could happen during the rest of the year, and what it means for the government’s long-standing goal of economic growth.

The year 2020 is a milestone for the Chinese Communist Party and its government, led by its President, amid hopes of building a prosperous society – a goal that will mark the party’s hundredth anniversary. In numbers, Beijing is looking for a doubling of gross domestic product (GDP) between 2010 and 2020, which, in order to do so, will require the Chinese economy to grow 5.6% this year.

Although annual growth has steadily declined over the last decade, from about 11% in 2011 to just 6.1% in 2019, the likelihood of a decline below 6% in 2020 seemed insignificant until the coronavirus appeared at the end of the year. The year 2019 and has not hammered the entire Chinese economy in just two months.

The rapid spread of COVID-19 and the harsh measures imposed by Beijing at the end of January caused a major blow to Asia’s largest economy in the first quarter. The demand for travel has been almost null for at least a month.

Although businesses could resume operations in many settlements in China, strict measures such as setting up body temperature monitoring stations or providing quarantine facilities, coupled with difficulties in transporting production materials and delayed return of migrant workers, delayed this process.

In another analysis, under the worst-case scenario, economic activity will recover to 75% in the first quarter and up to 95% in the second quarter of the year.

Coupled with lost business days due to the extended Chinese New Year holidays and partial recovery in the second half of February, it could shrink to 6.3% of GDP in the first quarter, compared to 2019.

But it’s already been halfway through March, and the pace of business resumption seems to be slower than the estimated 75%, and it creates preconditions for a sharper downturn in the first quarter.

This would be unprecedented in the years after 1978 when China undertook its economic liberalization.

There are now three questions that should be asked of the Beijing authorities:

First, given the gloomy situation, will the Chinese leadership adhere to its growth target? Second, what must happen to achieve this? And thirdly, what is the likely outcome given the new challenges and uncertainty?

First, it would be very difficult for the government to neglect its purpose. However, the goal may be a little rethinking. In the Chinese media, we see less emphasis on the specific growth rate and more focus on the concept of building an overall prosperous society.

Another useful technique is for Beijing to invoke the worsening external conditions associated with the coronavirus. Now that the World Health Organization (WHO) has declared a global pandemic, China’s harsh measures first seized the fire and then allowed businesses to restart.

Against the background of a likely global recession, even China’s modest growth will be seen as adequate.

Second, if the government insists on meeting the annual growth target of 5.6%, the economy will have to perform exceptionally strongly for the rest of the year, probably up 9% compared to 2019. But we must remember that after China’s economic growth fell below 9% in the fourth quarter of 2011, it would invariably gravitate around or below 7% over the next five years.

Even before the COVID-19 outbreak, the country’s economy was already under considerable pressure – the China-US trade war, declining business profits, shrinking working populations, and technological problems.

It should be noted that the Chinese government, both at the central and local levels, has taken policy measures since early February to support the economy, focusing on reducing business spending and securing financing. However, these measures can, at best, help companies to return to normal by going through short-term difficulties and maintaining employment.

Finally, what is likely to happen by the end of the year? A possible second wave of coronavirus would further delay business resumption, severely weakening China’s central role in the global supply chain and causing permanent damage to its manufacturing sector and employment. Global demand will also be severely weakened by the pandemic, further damaging the Chinese economy.

If in any way it comes to a rapid recovery in the second quarter and the business returns to normal and activity in the second half of the year, which seems quite optimistic, the economy will reach an annual growth of about 4.3%, which is significantly much lower than the target. The modest recovery in the second quarter will push growth well below 4%.

The government must abandon this target for GDP growth. In fact, in recent years it has emphasized other goals such as employment and poverty reduction. Accordingly, Beijing needs to step up its efforts to support small businesses and provide financial assistance to the most vulnerable. Now is not the time to focus on the numbers.