Premier faces China’s economic issues square on in meeting as inflation adds to pressures
- Premier Li Qiang met business leaders and economists on Tuesday before inflation data pointed to persistent pressures for China’s economy
Premier Li Qiang struck a positive tone on the state of China’s economy in a meeting with business leaders and economists, while also cautioning heightened complexities choking growth, as inflation data added to persistent pressures.
Stressing that China’s economy was in “stable operation”, Li admitted that factors affecting growth are “more complex than before” and that the difficulties needed to be resolved with greater efforts.
“We must candidly analyse the situation and not avoid the problems so as to accurately grasp the situation and make scientific policy decisions,” the premier said during the symposium in Beijing on Tuesday.
The world’s second-largest economy continues to grapple with an uneven recovery, but Li and other top leaders have tipped stable growth in the first half of the year and said that the around 5 per cent annual growth objective was attainable.
The producer price index – which measures the cost of goods at the factory gate – dipped 0.8 per cent last month, falling for the 21st straight month, although the reading represented a 17-month high.
At the meeting on Tuesday, Li said efforts must be dialled up to tackle the “troubles” in economic operation and that scientific decisions must be based on a factual diagnosis of the situation.
He also urged solid implementation of macro policies to unleash their effectiveness to promote development, while giving full support to the role of enterprises, who can expect targeted policy support to be further strengthened to bring about tech and innovation breakthroughs.
This is a gesture that Li … to assure entrepreneurs that he knows their difficulties and complaints
The attendees at Tuesday’s meeting included the heads of state-owned enterprises and private entrepreneurs, including tech start-up founders, and economists.
A Beijing-based scholar said the Chinese economy was set to grow by 5 per cent or slightly higher this year, but that the premier’s remarks were proof that his attention was on the complexities and deeply-entrenched problems.
“The premier has admitted to these challenges in a face-to-face meeting with business representatives and experts, not to cadres,” said the scholar, who spoke on the condition of anonymity due to the sensitivity of the issue.
“This is a gesture by Li, who is tasked by Xi to run the economy, to assure entrepreneurs that he knows their difficulties and complaints.
“Compared with Xi’s remarks in the May meeting, Li’s words are more reflective of the headwinds and problems.
“It’s a bid to reassure businesses that their hardship is not ignored, a bid to restore confidence as the premier will face the issues squarely.”
We anticipate the third plenum to come up with strong reform measures and effective economic policies.
The scholar added that with the recent exchanges with the business community before the third plenum, expectations for reform policies and implementation had been raised.
Peng Peng, executive chairman of the Guangdong Society of Reform think tank in Guangzhou, also said the top leadership was keenly aware of challenges and expectations.
“As we head into the second half of the year, stakes are high as we anticipate the third plenum to come up with strong reform measures and effective economic policies,” said Peng.
“Although the economy remains on a growth trajectory, the consumption sector is not optimistic. This is not only reflected in the weak growth of retail sales but also in the sluggish CPI.
“The fact is that residents are saving rather than spending under pessimistic expectations for employment, income and business profitability. It even puts pressure on achieving the annual growth target.”
