Li reassures on growth

Advertisement
Reassurance

From Xinhua:

Chinese Premier Li Keqiang said Tuesday that macroeconomic policies should be more scientific, forward-looking and targeted to promote continuous and healthy growth in the long run.

Li made the comments at a conference about the country’s current economic situation, after data showed China’s economic growth slowed to 7.5 percent in the second quarter from 7.7 percent in the first.

…”The lower limit is to stabilize economic growth and maintain employment, while the upper limit is to prevent inflation,” Li said.

Li said that the country’s economy has come to a new phase when it must rely more on economic transformation and upgrading. The government should coordinate the efforts of stabilizing economic growth, promoting restructuring and advancing reforms.

It should also establish a scientific macro policy framework to ensure stable market expectations and cultivate sound environment for development, Li said.

When economic growth is in the reasonable range, the government should take transforming the economic development pattern as the major task, promoting economic restructuring and giving better play to the market mechanism.

But when the economy reaches its upper or lower limits, macroeconomic policies should lay more emphasis on seeking growth and controlling inflation, Li said.

“The country must make macroeconomic policies more scientific, forward-looking and targeted,” he said.

The government should not change the direction of policies based only on temporary changes in economic barometers, or it will lose good opportunities for economic restructuring.

However, it should also be on high alert and fully-prepared when there is a risk for the economy to slip out of the reasonable range or to experience large fluctuations, the premier said.

He said the government should combine the use of multiple policy tools and give full play to the market mechanism, stress innovation-driven growth and take both short-term and long-term growth into consideration.

The country must advance the transformation of economic development mode and raise endogenous impetus of economic growth in a bid to promote continuous and healthy growth in the long haul, Li said.

Other outlets have reported this as conformation that China will do what it has to to reach 7.5% growth. It looks much more ambiguous than that to me. It’s a reassurance to prevent unemployment or inflation or getting away. That say nothing about the quality of growth.

Advertisement
About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.