The Chinese Prime Minister is ‘confident’ that he will achieve growth targets

AFP, Shanghai

Tue Nov 5 2024 11:55 am Last updated: Tue Nov 5 2024 11:59 am

People walk along Huguosi Street, Xicheng District, in Beijing. Photo: AFP/FILE

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People walk along Huguosi Street, Xicheng District, in Beijing. Photo: AFP/FILE

Chinese Premier Li Qiang said on Tuesday he was “fully confident” the country would achieve its economic targets this year. He praised the recent stimulus measures and suggested there is still room for more.

Beijing has set a growth target of around five percent for 2024, but the country saw its slowest growth in a year and a half in the third quarter as the post-pandemic recovery remained stubbornly uneven.

The government has announced a series of measures aimed at boosting activity, including interest rate cuts and the easing of some restrictions on home purchases, but analysts have criticized the lack of detail so far.

Observers hope a specific figure for the stimulus measures could emerge at this week’s meeting of the Standing Committee of the National People’s Congress (NPC), the top body of China’s rubber stamp parliament, in Beijing.

Speaking at the opening ceremony of a major international trade fair in Shanghai on Tuesday, Li said: “We have full confidence in the realization of this year’s goals and the development of China’s economy in the future.”

The Prime Minister, who is officially responsible for economic policy, suggested authorities still had room to maneuver when it came to further measures.

“Given downward economic pressures, there is a need for increasing countercyclical adjustments,” he said. “There is relatively a lot of room for financial and monetary policy, and the policy instruments are even more plentiful.”

An initial market rally when the measures were announced has since failed to materialise, with investors disappointed by the lack of detail.

But there have been glimmers of hope for the economy lately, including Chinese manufacturing output growing for the first time in six months in October.

Activity in China’s services sector also accelerated in October, according to an independent index published on Tuesday.

The Purchasing Managers’ Index (PMI) for services, calculated by S&P Global and Chinese business media Caixin, stood at 52 points, up from 50.3 in September. The figure is the best since July and anything above 50 is considered growth.

A review of the financial work is scheduled for this week’s meeting of the NPC standing committee, Beijing said.

And on Monday, lawmakers discussed a bill that would raise local government debt ceilings to replace existing hidden debts, according to state news agency Xinhua.

Another challenge facing the economy is escalating trade frictions with several key trading partners – most notably the European Union and the United States.

Speaking at the China International Import Expo (CIIE), an annual trade fair in the financial center of Shanghai, Li emphasized China’s determination to further open up to foreign investment.

Before an audience of a group of foreign dignitaries, including the Malaysian, Slovak and Serbian prime ministers, Li warned against increasing unilateralism and protectionism.

“From a global perspective, many problems have often emerged that should not be a problem since the exposure of all kinds of unfair behavior, which has caused the broken window effect that destroys rules,” he said, referring to a theory that shows visible signs of crime encourage further lawlessness.

China has spoken out against tariffs on its electric vehicles, imposed by the EU and Washington, among others.

Beijing last month announced preliminary tariffs on brandy imports from the EU, and has also launched anti-dumping investigations into EU pork and dairy imports.

French Trade Minister Sophie Primas, attending the CIIE, told AFP on Monday that the window for negotiations remained “open” but warned France it would take all possible measures over provisional tariffs on European cognac.