News / Economy

China's Premier Pledges Support for Economy

FILE - Chinese Premier Li Keqiang.
FILE - Chinese Premier Li Keqiang.
Reuters
China's Premier Li Keqiang sought to reassure jittery global investors that Beijing was ready to support the cooling economy, saying the government had the necessary policies in place and would push ahead with infrastructure investment.
         
Recent weak economic data and mounting signs of financial risks have dimmed outlook for the world's second-largest economy, sparking talk of imminent government action or even a mini-stimulus plan to shore up growth.
          
“They don't want investors and businesses to lose confidence. So obviously they want to make it clear they have the ability to step in if necessary. So I think that's probably the main point behind it,” said Julian Evans-Pritchard, China economist at Capital Economics in Singapore.
          
In a speech to a meeting in China's northeast made on Wednesday and reported by the Xinhua news agency early on Friday, Li said government has policies prepared and would roll out targeted measures step by step to aid the economy.
          
“We have gathered experience from successfully battling the economic downturn last year and we have policies in store to counter economic volatility for this year,” Li said.
          
“We will launch relevant and forceful measures according to what we have planned in our government work report,” he added, referring to his report to China's annual parliament session earlier this month.
          
Among those measures are speeding up construction of basic infrastructure, including railways, highways and water conservation projects in the central and western provinces, as well as boosting trade and cutting companies' financing costs.
          
“The overall performance in the economy so far this year is relatively stable and we saw some positive changes, but we cannot neglect the increasing downward pressure and difficulties,” he said.
          
China's exports unexpectedly tumbled last month and other economic data and business sentiment surveys have consistently undershot expectations, suggesting the economy's first quarter performance was the weakest in five years.
          
Sense of unease
          
Adding to market jitters are signs of financial strain - China's first ever bond default earlier this month, a bankruptcy of a small property developer and a run on small rural banks in one of China's coastal provinces earlier this week.
          
While isolated and of limited scale, the events feed into growing sense of unease about risks stemming from a combination of a rapid rise in corporate debt and slowing economy.
          
However, Li said the economy was robust enough to fend off potential risks.
          
“We must also note that China's economy has quite strong tenacity and large wiggle room,” he said.
          
Market reaction to Li's comments was muted, with only Hong Kong shares ticking up.
          
“The market reaction really hasn't been that great as these comments have been said many times before,” said Du Changchun, an analyst at Northeast Securities in Shanghai.
          
“No matter whether you look at industry performance or economic data, things aren't looking too optimistic. So even if he [Li] says this, unless we see some positive policies the market will not go up too much,” said Changchun.
          
China has set a GDP growth target of around 7.5 percent for 2014, which some economists said could be too ambitious after what data will likely show was a weak first quarter.
          
The government itself has said that the target is not fixed and that growth near that level would also be acceptable. However, it has also pledged to boost employment, meaning that it must keep growth near the target or risk failing to meet its job promise.
          
Other analysts said it is not easy for Beijing to turn on the stimulus taps, given an already acute overcapacity problem in some industries and the current government focus on putting structural reforms ahead of growth.
          
“Those measures Li mentioned were not new. It only means government will start work on projects that have already been approved,” said Xiao Bo, economist at Huarong Securities in Beijing.
          
“It's impossible for the government to unveil stimulus policies as we haven't solved the problems left over from the 4 trillion yuan spending,” he said, referring to China's big stimulus package unveiled in late 2008 in response to the global financial crisis.

You May Like

Analysis: China Raises Hong Kong Rhetoric to Tiananmen Level

A front-page commentary in The People’s Daily called the current demonstrations 'chaos,' the same word Party officials used 25 years ago to describe the Tiananmen Square protests More

US Airstrikes Anger Syrian Civilians Fleeing Their Homes

Pentagon officials say they have seen no credible evidence of civilian deaths caused by US airstrikes against Islamic State militants More

Child Sexual Exploitation to Worsen in SE Asia

Southeast Asia’s planned economic integration is a key step for boosting the region’s productivity, but carries downsides as well More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
The Legacy of Jimmy Carter: The Preacher from Plainsi
X
October 01, 2014 10:45 AM
It is common in the United States to see tourists flock to sites associated with America's presidents. Some are privately owned and others are run by the National Park Service or the National Archives -- but most have helped draw business and people into the towns and cities where they are located. As VOA’s Kane Farabaugh reports, there is one particular presidential hometown that is unique in what it has to offer those who make the trip.
Video

Video The Legacy of Jimmy Carter: The Preacher from Plains

It is common in the United States to see tourists flock to sites associated with America's presidents. Some are privately owned and others are run by the National Park Service or the National Archives -- but most have helped draw business and people into the towns and cities where they are located. As VOA’s Kane Farabaugh reports, there is one particular presidential hometown that is unique in what it has to offer those who make the trip.
Video

Video Hong Kong Protests Draw New Supporters on National Holiday

On the 65th anniversary of the founding of Communist China, Hong Kong protesters are hoping to stage the largest pro-democracy demonstration since the 1989 Tiananmen protests. VOA's Brian Padden visited one of the protest sites mid-day, when the atmosphere was calm and where the supporters were enthusiastic about joining what they are calling the umbrella revolution.
Video

Video India's PM Continues First US Visit

India's prime minister is on his first visit to Washington, to strengthen political and economic ties between the world's oldest and the world biggest democracies. He came to the U.S. capital from New York, the first stop on his five-day visit to the country that denied him an entry visa in the past. From Washington, Zlatica Hoke reports Modi seemed most focused on attracting foreign investment and trade to increase job opportunities for his people.
Video

Video Malaysia Struggles to Stop People Joining Jihad

Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Could US Have Done More to Stop Rise of Islamic State?

President Obama says airstrikes against Islamic State militants in Syria will likely continue for some time because, in his words, "there is a cancer that has grown for too long." So what if President Obama had acted sooner in Syria to arm more-moderate opponents of both the Islamic State and the Syrian government? VOA State Department Correspondent Scott Stearns reports from the United Nations.
Video

Video Treasure Hunters Seek 'Hidden Treasure' in Central Kenya

Could a cave in a small village in central Kenya be the site of buried treasure? A rumor of riches, left behind by colonialists, has some residents dreaming of wealth, while others see it as a dangerous hoax. VOA's Gabe Joselow has the story.
Video

Video Ebola Patients Find No Treatment at Sierra Leone Holding Center

At a holding facility in Makeni, central Sierra Leone, dozens of sick people sit on the floor in an empty university building. They wait in filthy conditions. It's a 16-hour drive by ambulance to Kailahun Ebola treatment center. Adam Bailes was there and reports on what he says are some of the worst situations he has seen since the beginning of this Ebola outbreak. And he says it appears case numbers may already be far worse than authorities acknowledge.
Video

Video Identifying Bodies Found in Texas Border Region

Thousands of immigrants have died after crossing the border from Mexico into remote areas of the southwestern United States in recent years. Local officials in south Texas alone have found hundreds of unidentified bodies and buried them in mass graves in local cemeteries. Now an anthropologist and her students at Baylor University have been exhuming bodies and looking for clues to identify them. VOA’s Greg Flakus has more from Waco, Texas.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid

World Currencies

EUR
USD
0.7866
JPY
USD
109.25
GBP
USD
0.6139
CAD
USD
1.1120
INR
USD
61.428

Rates may not be current.