China’s premier strikes bullish tone on economic growth despite widespread concerns

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China’s Premier Li Qiang struck an upbeat tone about expansion in the world’s second largest economy on Tuesday, saying growth in the second quarter will be higher than it was in the first three months of the year.

“We are on track to achieve the annual growth target of ‘around 5%’ that we set earlier this year,” he told delegates at a World Economic Forum (WEF) summit in the northern Chinese city of Tianjin.

“We are fully confident and have the ability to promote the high quality development track of China’s economy over a long period of time.”

Li’s comments come as Beijing grapples with mounting economic headwinds. After China achieved solid 4.5% expansion in the first quarter, its recovery has lost momentum across many sectors, including manufacturing, property, retail and exports.

On Monday, S&P Global cut its 2023 growth forecast for the country to 5.2% from 5.5% previously. It was the first time a global credit ratings agency had cut China’s growth projections this year. Its analysts cited weak confidence among consumers and in the housing market as the key risks.

Earlier this month, a string of Wall Street banks also slashed their forecasts. Goldman Sachs said the recovery sparked by the country’s post-Covid reopening in the first quarter appeared to have “fizzled out” in the April-to-June period as it downgraded its annual forecast to 5.4% from 6%.

To bolster growth, the People’s Bank of China cut its main benchmark lending rates last week for the first time in 10 months. But many analysts called for a much bolder stimulus package, including measures to boost consumption and the housing market.

On Tuesday, Li pledged to do more to support the recovery.

“We will introduce … more pragmatic and more effective measures,” he said, adding the measures aim to boost domestic demand and market vitality.

Li spoke at a forum that was held in person for the first time in four years. Known as the “Summer Davos,” it has over 1,500 participants, including the prime ministers of New Zealand, Vietnam, Barbados and Mongolia, as well as the international business and financial elite.

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