Premier Li Keqiang answers questions at a news conference after the conclusion of the
national legislative session on May 28, 2020, in Beijing.
Emphasis on keeping businesses going to support jobs, people's livelihoods
China may achieve positive economic growth this year despite the impact of the novel
coronavirus pandemic, and still has ample policy room to keep
the world's second-largest economy on a steady track of growth, Premier
Li Keqiang said on Thursday.
"We have reserved policy space on the fiscal, financial, social security and other
fronts, and we are in a strong position to quickly introduce new measures,
if necessary, without hesitation," Li said at a news conference after the
closing of the annual session of the National People's Congress.
"I'm confident that we will, under the strong leadership of the Communist
Party of China Central Committee, with Comrade Xi Jinping at its core, and with
joint efforts of people across the nation, be able to prevail
over the current difficulties, fulfill
our tasks and goals for the whole year and complete the building of an all-around
moderately prosperous society," he said.
"Keeping China's economic fundamentals stable in itself will be a
contribution to the whole world, and China will remain a positive
force driving global economic recovery and growth," he added.
China has decided to roll out a number of supportive policies to reduce the
operational costs of enterprises, increase investment in infrastructure to
generate growth and improve people's livelihoods.
The country has pledged more government spending, raising the fiscal deficit
target to at least 3.6 percent of GDP and issuing 1 trillion yuan ($139.8 billion)
in special treasuries.
The authorities have also planned to create more than 9 million new urban
jobs, keep the surveyed urban unemployment rate at around 6 percent
and maintain consumer inflation at around 3.5 percent.
"We will do our utmost to keep China's economic growth stable and, at
the same time, we must ensure that all measures taken are well-calibrated," Li said.
"The key for the government to achieve its economic goals is to
protect businesses and help them make it through hard times, because
it matters for job creation and people's basic living needs," said Xu
Hongcai, deputy director of the economic policy committee of the China
Association of Policy Sciences.
"Reducing their operating costs is one of the most effective ways to help
them survive and resolve their difficulties," he added.
China still has much room for economic maneuvers to keep its economy
on track, analysts said.
It is still possible for the country to raise its government deficit ratio to
counter an economic downturn as the leverage ratio of the central
government is still relatively low compared with that of the United States
and European nations. Xu said choices also include further reducing banks' reserve
requirement ratio, which is the money banks must set aside as reserves.
Xu Gao, chief economist at BOC International, said interest rate cuts also could
be used by China to boost the economy. Local government financing platforms
could play a bigger role in functioning as a quasi fiscal tool, he said.
Xu Gao also said that the Chinese economy is recovering solidly and the trend
is expected to continue.
"The recovery of the Chinese economy is on a solid track, judging from key
economic data for March and April, as the country's macroeconomic policies
have been very accommodative. I expect such trends to continue for the rest of the year."
But he said that special attention should be paid to the task of ensuring the
survival of enterprises and preventing large-scale bankruptcy as they are
directly linked with employment and people's livelihoods.
Li also said that the role of the market will be more respected, and the
priority for supportive policies will be on "boosting market vitality".
Yang Weiyong, an associate professor of economics at the University
of International Business and Economics in Beijing, said he considers
it major progress for the government to liberalize regulation and facilitate
business operations. "Allowing the market to play a larger role will help
China's economic recovery this year and also help its long-term economic
restructuring," he said.
Zhou Lanxu contributed to this story.