Chinese Premier Li Keqiang (李克強) yesterday said that he is confident of hitting this year’s economic growth target — despite headwinds, including the war in Ukraine — pledging to provide more policy support during a politically sensitive year.
Li, who confirmed that he is in the final year of his premiership, on Saturday last week launched the annual session of the Chinese National People’s Congress by setting a growth goal of about 5.5 percent, which many economists say is ambitious given challenges including a property downturn, COVID-19 flare-ups and an uncertain global recovery.
“China’s economy will be able to overcome the difficulties and achieve major full-year economic and social goals and tasks, and lay a solid foundation for the development of the country in the future,” Li told a news conference after the close of the National People’s Congress session yesterday.
Many economists say that the goal for this year will require additional stimulus to ward off a slowdown in the world’s second-largest economy, which could undermine job creation.
“To achieve growth of around 5.5 percent ... will not be easy, and there must be corresponding macro policy support,” Li said.
This year, stability is the priority in China, with Chinese President Xi Jinping (習近平) poised to secure a third term during a once-in-five-years Chinese Communist Party congress in the autumn.
China’s strong recovery from its COVID-19 pandemic-induced slump lost momentum in the middle of last year, weighed down by debt problems in the property market, and restrictions amid the pandemic that hit consumer confidence and spending.
Li, who is to step down when his second five-year term expires in March next year, acknowledged that there are renewed downward risks and challenges facing the economy that will require policy support, including tax and fee cuts for businesses.
“China still has many problems to solve such as climate change, income disparity and debt, and all these issues need be forcefully dealt with over the medium and long term, including this year,” he said.
China has set a target of creating more than 11 million new urban jobs this year, but Li said that 13 million would be preferable, citing the need to create jobs for new college graduates and migrant workers.
“China set its 2022 growth target at the upper band of forecast range due to concerns about job stability and financial risks,” said Tommy Xie (謝東明), China economist at OCBC Bank in Singapore, adding that China usually hits the target.
“They need to work extra hard this time,” Xie said in a note.
Li said that China would also ramp up tax rebates for companies if current ones yield good results.
Li has said that tax cuts and rebates would total about 2.5 trillion yuan (US$395.22 billion) this year.
To spur growth, the People’s Bank of China has cut interest rates and banks’ reserve requirement ratio, with more easing steps expected.
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