China's planners to fight weak demand

China is formulating plans to boost the recovery and expansion of consumption, the state planner's spokesperson, Meng Wei, said yesterday, signaling officials are worried about weak demand despite a sharp rebound in retail sales.

China's economy grew at a faster-than-expected pace of 4.5 percent in the first quarter, as businesses and consumers came out of pandemic disruptions, although headwinds from a global slowdown point to a bumpy ride ahead.

The National Development and Reform Commission pledged to promote a sustained recovery in consumption.

"Currently, we are working on drafting documents on the recovery and expansion of consumption, mainly focusing on key areas such as stabilizing big-ticket consumption, enhancing service consumption and expanding rural consumption," said Meng.

Meng, at a news conference, also mentioned stabilizing of automobile use, which was a big part of supporting consumption, by promoting new-energy vehicles in rural areas.

The commission will also further reduce foreign investment restrictions by shortening the negative list for foreign investment, Meng added.

This came as analysts at JP Morgan and Citi upgraded their forecasts for China's full-year growth in 2023 to 6.4 percent and 6.1 percent.

UBS also raised its forecast for China to 5.7 percent.

Hong Kong stocks fell 282 points to close at 20,367 points yesterday, dragged down by tech stocks and developers, as uncertainty over US monetary policy outweighed optimism over an economic recovery in China.

In money markets, the onshore yuan fell to a one-month low to close at 6.8966 per US dollar.