Chinese premier sends note of confidence in economic growth despite coronavirus and geopolitical instability

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Chinese Premier Li Keqiang meets the press via video link after the closing of the fifth session of the 13th National People’s Congress (NPC) at the Great Hall of the People in Beijing, capital of China, March 11, 2022. Photo: Xinhua

Chinese Premier Li Keqiang explained what the government of the second-largest economy will offer this year in its policy toolkit to maintain the country’s status as a global economic powerhouse, as he expressed confidence to achieve this year’s growth target despite headwinds in a press. conference on Friday.

The Prime Minister’s press conference, often seen as a landmark event that marks the end of the two annual sessions and an important channel through which foreign media communicate with Chinese officials, is a much-awaited occasion this year, as the world is curious to know how China is doing. to navigate economic development in the face of multifaceted challenges from abroad and at home.

In addition to old “wounds,” such as chilling US-China relations and coronavirus disruptions, the country now faces new challenges, such as the fallout from the ongoing conflict between Russia and Ukraine and the surge in oil prices.

During the press conference, Premier Li answered 13 questions, touching on various economic issues such as this year’s GDP target, employment, common prosperity and tax cuts.

Due to epidemic prevention regulations, reporters from Chinese and foreign media are still required to ask the Prime Minister their questions via video link, but this did not reduce their passion for asking questions at the event, as it was the last press conference. of Premier Li during his tenure.

On Friday morning, around 100 journalists arrived at the Media Center a few hours before the press conference to prepare to report on this important event.

After the prime minister finished answering the last question, reporters cheered, and some foreign reporters at the press conference told the Global Times that they were impressed with Li’s answers to so many related questions. international issues related to international hot spots and China’s internal affairs. economic development, and China has done a great job of developing and opening up, and protecting its people over the past decade, especially under the coronavirus.

“My impression of Premier Li’s responses is pragmatic, confident and people-oriented,” Bo Wenxi, chief economist at wealth management firm IPG China, told the Global Times on Friday.

China sets 2022 GDP growth target at around 5.5%

China sets 2022 GDP growth target at around 5.5%

A note of trust

Li’s answer to the first question, also a general tone of the press conference, explained why the government set the target of about 5.5% this year and how the government plans to achieve this target. .

China set an economic target of over 6% last year, but its real growth has far exceeded that target at 8.1% in 2021.

Li’s explanation also came at a time when overseas media have cast many doubts about China’s GDP target this year, including pointing out that the target is the lowest in decades and predicting that China will not be able to achieve this due to new challenges.

Li stressed the feasibility of the GDP target, using a mountaineering metaphor to illustrate that growth is more difficult with China’s booming economic size and new economic challenges.

“A growth rate of around 5.5 percent is high-level stability, which is an improvement. It is not easy to achieve and needs to be supported by relevant macroeconomic policies,” Mr. Li.

The 5.5 percent growth this year means additional economic output of more than 100 trillion yuan ($15.78 trillion), equivalent to the economy of a medium-sized country, he said.

Li’s explanation reflects Chinese policymakers’ confidence in China’s economic resilience and ability to weather setbacks, backed by China’s market scale and industrial structure, Bo said.

“It shows Li’s confidence that the disruption of unstable factors on the Chinese economy will be relatively small, although he also expressed some level of caution,” Bo told the Global Times on Friday.

Some foreign institutions also welcomed China’s setting of the 5.5% target, as they said the “slowdown” in China’s economic targets will avoid challenges in the current economic environment with high uncertainties. , notably inflation, the public deficit and unemployment.

“2022 is a year in which the Chinese economy returns to fundamentals…we have seen the need for pragmatic and agile management of the Chinese economic system in 2022 while maintaining the medium and long-term orientation set in the five-year plan “, Denis Depoux, global managing director of Roland Berger, told the Global Times.

Economic figures highlighted at Premier Li's press conference Editorial: Yang Ruoyu/GT Graphic: Feng Qingyin/GT

Economic figures highlighted at Premier Li’s press conference Editor: Yang Ruoyu/GT Graphic: Xu Zihe/GT

Toolbox to support growth

Elaborating further on how China plans to achieve its economic goals, Premier Li unveiled a number of steps China is ready to take this year. For example, the country will stick to tax cuts and fee reductions, which have proven to be the most effective policy in recent years, he said. In particular, China will return taxes withheld from micro-enterprises by the end of June.

In terms of employment, Li said China needs new employment platforms, while the government will provide support such as providing training services to new workers. The government will also improve policies to address issues such as social security and labor rights for “flexible employees”, such as delivery workers.

Experts like Mr. Bo are convinced that China’s policy toolkit, which has proven to be strong enough and has shown timely adjustments over the past year, is sufficient to help China achieve a stable economic growth despite economic difficulties in 2022.

Zhou Maohua, macroeconomic analyst at Everbright Bank, said China’s macroeconomic policies this year will remain consistent with last year, in areas such as supporting micro-enterprises, stimulating consumption recovery and foreign trade support. But policies will also be fine-tuned, such as increasing the support strength of service industries and infrastructure.

Premier Li also pointed out some policy adjustments. For example, he revealed that the government will consider increasing the strength of tax refunds if the effects of existing policies are good.

China’s ample foreign policy toolkit and internal economic momentum are causing economists to hold optimistic views and strongly anticipate China’s prospects of achieving steady growth and maintaining the global economic engine this year.

“There is a certainty amidst the uncertainties that China has plenty of ‘bullets’ — economic tools, resources, political wisdom — to achieve stable economic growth, not to mention the fact that many other regions have problems. , such as US inflation and Europe’s loss of sense of security. China’s opportunity space is larger than that of any other region in the world,” said Li Haidong, a professor at the Institute of International Relations, China Foreign Affairs University in Beijing, to the Global Times.

He also noted that due to geopolitical situations, more capital may flow from overseas markets to China this year.

A view of a job fair for students at an exhibition center in Shenzhen, south China's Guangdong Province, Oct 10, 2021 Photo: cnsphoto

A view of a job fair for students at an exhibition center in Shenzhen, south China’s Guangdong Province, Oct 10, 2021 Photo: cnsphoto

People-centered mindset

Experts also said Premier Li’s responses showed a “people-centered” mindset in designing economic policies, as not only did he answer many livelihood questions, he said. the phrase “people’s livelihood” more than 10 times, but he also pointed out that China will design economic policies based on livelihood needs.

For example, when explaining employment support policies, Li emphasized that fiscal and monetary policies should be conducted “surrounding” the achievement of the employment target.

He said the authorities will strengthen management in areas involving people’s life, health and interests, such as food, medicine, security, production and finance. The government will also improve management methods in parallel with the evolution of new economic models, in order to ensure fair competition in the market.

Bo said the formulation and direction of economic policy this year is more “pragmatic”, as economic growth is ultimately supported by people’s demands.

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