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

US Gives Malaysia Questionable Upgrade in Human Trafficking Ranks

Malaysia’s upgrade seen as removing barrier to country’s participation in the US-led 12-nation Trans-Pacific Partnership More

Turkey, US Try to Establish Buffer Despite Differences

Coalition airstrikes in proposed zone would aim to drive out Islamic extremists, allowing targeted area to come under sway of anti-Assad rebels More

Video US: Millions Exploited by Vast Fortunes of Human Trafficking

State Department's annual report calls exploitation 'modern slavery,' brutalizing girls, women into prostitution and forcing men, women and children into low-wage jobs across the globe More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Calls Fight Against Human Trafficking a Must Wini
X
July 28, 2015 12:21 AM
The United States is promising not to give up its fight against what Secretary of State John Kerry calls the “scourge” of modern slavery. Officials released the country’s annual human trafficking report Monday – a report that’s being met with some criticism. VOA’s National Security correspondent Jeff Seldin has more from the State Department.
Video

Video US Calls Fight Against Human Trafficking a Must Win

The United States is promising not to give up its fight against what Secretary of State John Kerry calls the “scourge” of modern slavery. Officials released the country’s annual human trafficking report Monday – a report that’s being met with some criticism. VOA’s National Security correspondent Jeff Seldin has more from the State Department.
Video

Video Iran Nuclear Pact Wins Few New US Congressional Backers

Later this week, President Barack Obama returns from a trip to Africa to confront a U.S. Congress roiled by the nuclear accord with Iran, an agreement that has received the blessing of the U.N. Security Council. Days of intensive lobbying and testimony by top administration officials have won few new congressional supporters of the pact. VOA’s Michael Bowman reports.
Video

Video Washington DC Underground Streetcar Station to Become Arts Venue

Abandoned more than 50 years ago, the underground streetcar station in Washington D.C.’s historic DuPont Circle district is about to be reborn. The plan calls for turning the spacious underground platforms - once meant to be a transportation hub, - into a unique space for art exhibitions, presentations, concerts and even a film set. Roman Mamonov has more from beneath the streets of the U.S. capital. Joy Wagner narrates his report.
Video

Video Obama Encourages Kenya to Fix Cultures of Corruption, Discrimination

President Barack Obama bid farewell to Kenya Sunday with a major speech at as stadium outside the capital Nairobi where he called on Kenyans to change the cultures of corruption and discrimination that can hold society back. VOA East Africa Correspondent Gabe Joselow has the story.
Video

Video Europe’s Twin Crises Collide in Greece as Migrant Numbers Soar

Greece has replaced Italy as the main gateway for migrants into Europe, with more than 100,000 arrivals in the first six months of 2015. Many want to move further into Europe and escape Greece’s economic crisis, but they face widespread dangers on the journey overland through the Balkans. VOA's Henry Ridgwell reports.
Video

Video Stink Intensifies as Lebanon’s Trash Crisis Continues

After the closure of a major rubbish dump a week ago, the streets of Beirut are filling up with trash. Having failed to draw up a plan B, politicians are struggling to deal with the problem. John Owens has more for VOA from Beirut.
Video

Video Paris Rolls Out Blueprint to Fight Climate Change

A U.N. climate conference in December aims to produce an ambitious agreement to fight heat-trapping greenhouse gases. But many local governments are not waiting, and have drafted their own climate action plans. That’s the case with Paris — which is getting special attention, since it’s hosting the climate summit. Lisa Bryant takes a look for VOA at the transformation of the French capital into an eco-city.
Video

Video Racially Diverse Spider-Man Takes Center Stage

Whether it’s in a comic book or on the big screen, fans have always known the man behind the Spider-Man mask as Peter Parker. But that is changing, at least in the comic book world. Marvel Comics announced that a character called Miles Morales will replace Peter Parker as Spider-Man in a new comic book series. He is half Latino, half African American, and he is quite popular among comic book fans. Correspondent Elizabeth Lee reports from Los Angeles.
Video

Video California Towns Welcome Special Olympics Athletes

Cities and towns in Southern California are greeting thousands of athletes who are arriving for Special Olympics, a competition for people with intellectual disabilities. The games will run from July 25th through August 2nd. VOA's Mike O'Sullivan reports from Pasadena, California, where athletes from Namibia, Singapore and Tanzania got a rousing welcome from local residents.
Video

Video Critics of Japan Defense Policy Focus on Okinawa

In Okinawa, many locals have long complained that Tokyo places an unfair burden on the tiny island by locating most of Japan's U.S. military bases there. As Japan's government moves toward strengthening and expanding the country's defense policies, opponents of those plans are joining local protesters in Okinawa, voicing concern about where the country is headed. VOA’s Brian Padden reports from Okinawa.
Video

Video IS Uses Chemical Weapons in Syrian Attack

Islamic State militants have added a new weapon in their arsenal of fear: chemical weapons. VOA Kurdish service reporter Zana Omer was on the scene within hours of a recent attack in Hasakah, Syria, and has details of the subsequent investigation, in this report narrated by Miguel Amaya.
Video

Video Historic Symbol Is Theme of Vibrant New Show

A new exhibit in Washington is paying tribute to the American flag with a wide and eclectic selection of artwork that uses the historic symbol as its central theme. VOA’s Julie Taboh was at the DC Chamber of Commerce for the show’s opening.
Video

Video Hoverbike Flying Toward Reality

Another long-standing dream of many technological inventors is quickly approaching reality: U.S.- and British-based firms are cooperating in the development of an individual flying platform they call a hoverbike. They say it may revolutionize the concept of flying, including in the U.S. military. VOA’s George Putic reports.
Video

Video As Japan Expands Defense Role, Protests Follow

The Japanese government is moving forward with a controversial security bill that would authorize the military to fight abroad for the first time since World War II. Leaders say it is critical to defend against rising threats from China and North Korea. VOA’s Brian Padden reports from Japan on the big changes ahead, and the opposition they are drawing.
Video

Video Replacing Poppies with Coffee in Myanmar

The remote mountains of Myanmar’s Shan state are home to the second-largest opium-producing region in the world. After a drop during the 2000s, production surged in the past eight years to feed an increasing demand for heroin in China. But farmers are now making less on the crop, and the U.N. is hoping many will make the switch to growing coffee. Daniel de Carteret reports for VOA from Taunggyi.

VOA Blogs

World Currencies

EUR
USD
0.9043
JPY
USD
123.19
GBP
USD
0.6445
CAD
USD
1.3030
INR
USD
64.170

Rates may not be current.