China’s Premier Li Says Economy Can Grow If Key Tasks Done

(Bloomberg) --

China’s economy can grow this year if the key tasks set out by the government, including ensuring employment and people’s livelihoods are achieved, according to Premier Li Keqiang.

It is “practical and realistic” to not set a numerical growth target this year as China is not immune from the economic shocks brought about by the pandemic, the premier said at a press conference as the annual parliament session closed on Thursday. Li said the government has the ability to take further action should the outlook deteriorate.

“We have also reserved policy space on the fiscal, financial, social security and other fronts, and we are in a strong position to quickly introduce new measures should the situation call for it, without any hesitation,” he said. “It is essential that we keep China’s economic development on a steady course.”

The government’s policies were aimed at providing “vital relief” to businesses and to revitalizing the markets, and the focus will be on keeping jobs and protecting people’s lives “instead of undertaking large infrastructure construction projects,” Li said.

With consumption now the main driver of economic growth, Li emphasized that the government’s policies were aimed at boosting private demand.

“Some 70% of funds in the current large-scale measures will be used to support increasing people’s income to spur consumption and energize the market,” said Li.

He repeated that the money raised from the sale of special sovereign bonds and from the increased budget deficit would primarily be channeled to local governments. A special transfer payment system will be established to make sure the money reaches companies, especially smaller firms, and also benefits people with low incomes, the jobless and the old, he said.

“Real name records will be established, no cooking of books will ever be allowed, and we will be open to public oversight,” Li said, referring to the distribution of spending.

(Updates with more details from fourth paragraph.)

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