Much room for China to manoeuvre policy, says Li

Li vows to keep China’s economy growing at a reasonable speed, even as he acknowledges the job is not easy. — EPA

BEIJING: China has a lot of room to manoeuvre its policy and boost its economy having avoided using strong, short-term stimulus in recent years, Premier Li Keqiang said, in a rare suggestion that authorities can do much more to stoke growth.

Li, addressing a news conference at the end of China’s annual session of parliament, tried to allay fears about a stumbling economy by vowing to keep it growing at a reasonable speed, even as he acknowledged the job is not easy.

He assured his audience that policymakers would prop up the economy if growth was at risk of breaching a “lower limit”, or hurt employment and income gains.

“In recent years, we have not taken any strong, short-term stimulus policies, so we can say our room for policy manoeuvre is relatively big, the tools in our toolbox comparatively many,” Li said.

“If the slowdown in growth affects employment and incomes, and approaches the lower limit of a reasonable range, we will stabilise policies and the market’s long-term expectations for China,” he said at a two-hour briefing.

“And at the same time, (we will) increase the intensity of targeted (policy) control,” he said.

Turning to his government’s plans to deliver economic growth of around 7% this year, Li said: “It looks like economic growth has been adjusted lower, but in reality achieving this target will not be easy.”

A 7% growth target is China’s lowest in 11 years and would mark the slowest expansion in a quarter of a century if it came to pass.

Li reiterated that authorities would do what they could to keep growth “within a reasonable range”, and denied any assertion that China was exporting deflation. — Reuters