Chinese Premier Li Qiang (李強) yesterday said that governments that attempt to politicize their economies would fragment the world as the US and Europe “de-risk” supply chains from the Asian nation.
“The invisible barriers put up by some people in recent years are becoming widespread and pushing the world into fragmentation and even confrontation,” China’s No. 2 official said at the World Economic Forum’s Annual Meeting of the New Champions in Tianjin, China.
“We should oppose the politicization of economic issues and work together to keep global industrial and supply chains stable, smooth and secure,” he said at the first in-person gathering of the forum since 2019 following the end of COVID-19 restrictions.
Photo: AP
The event is often described as the “summer Davos.”
Li’s comments came as the administration of US President Joe Biden pushes forward with an executive order that would regulate and potentially cut off certain US investments in China, people familiar with the plans said, and as Moscow’s war in Ukraine sparked an attempted military uprising against Russian President Vladimir Putin, casting further doubt over the future stability of global energy markets.
The premier’s address was a rare opportunity to hear one of China’s top officials lay out a road map for the world’s second-largest economy, as its recovery flashes a growing number of warning signs.
He projected a positive outlook for the domestic economy, reassuring investors that China was “fully confident and capable” of developing stable, high-quality growth over the long term.
He added that the nation would “roll out more practical and effective measures” on expanding domestic demand and stimulating market dynamism.
Those promises were largely reiterations of prior statements made by Chinese officials, and gave few concrete answers to investors who have been on high alert for a raft of new support measures to boost the economy since the central bank’s recent interest rate cut earlier this month.
After falling for five straight days, Chinese equities rose early and extended gains yesterday — likely reflecting a boost in sentiment as the People’s Bank of China pushed back against a weaker yuan through its daily fixing. The Hang Seng China Enterprises Index rose 2.08 percent.
“There is slight optimism driven by the speech, but I don’t think he announced anything concrete,” said Vey-Sern Ling (凌煒森), managing director at Union Bancaire Privee.
Li said that China was on course to hit the government’s growth target of about 5 percent, a goal already seen as conservative.
Even though several major investment banks have lowered their forecasts for GDP growth, they still see the economy expanding 5.5 percent this year, the median estimate in a Bloomberg survey showed.
“China seems to be rather confident in terms of maintaining its growth target,” Natixis SA senior economist Gary Ng (吳卓殷) said. “The way to do it is that there will be more stimulus coming out and probably regulatory relaxation as well.”
More details are likely to come after a key meeting next month of the Chinese Communist Party’s Politburo, the top decisionmaking body led by Chinese President Xi Jinping (習近平).
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