China’s Premier Li Qiang has pledged that Beijing will take any necessary steps to aid its ailing economy, in a keynote speech that some analysts complained was short on detail.
Li, speaking on Tuesday at a World Economic Forum summit in Tianjin, said China will take steps to boost demand, invigorate its markets and promote development, while at the same time accelerating the green transition and opening “high level” parts of its economy to the outside world.
But Li did not elaborate on those plans, leaving investors hanging on for concrete details of the government’s stimulus policies.
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China’s economic growth in the second quarter will be higher than the first and is expected to reach the annual economic growth target of around 5%, Li said.
China’s GDP grew 4.5% year-on-year in the first three months of the year, but momentum has faded sharply since.
Several major banks have cut their 2023 gross domestic product (GDP) forecasts after May industrial output and retail sales data missed forecasts and indicated Beijing would need to take further steps to shore up a shaky post-Covid recovery.
Nomura has cut its 2023 GDP forecast to just 5.1% from 5.5%, adding in a note that its new forecast incorporated the impact of potential policy stimulus measures.
“We will launch more practical and effective measures in expanding the potential of domestic demand, activating market vitality, promoting coordinated development, accelerating green transition, and promoting high-level opening to the outside world,” Li said.
Having just returned from visits to Germany and France last week, Li also alluded to the recent negative rhetoric directed towards China by the leading Western democracies.
“Everyone knows some people in the West are hyping up this so-called ‘de-risking,’ and I think, to some extent, it’s a false proposition,” Li said, in an apparent reference to European Commission President Ursula von der Leyen’s assessment that Europe should “de-risk” diplomatically and economically from China.
“The invisible barriers put up by some people in recent years are becoming widespread and pushing the world into fragmentation and even confrontation,” Li said, turning to the trade tensions between the United States and China.
Li Backs Globalisation
“We firmly oppose the artificial politicisation of economic and trade issues,” the Chinese premier said, adding that effective communication was vital to avoid misunderstandings between nations.
Taking up one of his key themes since being appointed in March, Li said the trend of globalisation remains intact despite some setbacks, and China remains open for business and welcomes foreign investors.
Speaking in a separate meeting with Chinese and foreign business leaders, Li sought to reassure them that the government would continue to support foreign firms’ presence.
For example, Li said China would improve government procurement policies for medicines and pay close attention foreign firms’ concerns over new data management regulations.
Without elaborating, Li said China would not misuse security checks on foreign firms, while also cautioning that some had violated Chinese rules.
- Reuters with additional editing by Sean O’Meara
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