Li promises more support amid growth disruptionsTop News | Agencies and Winnie Lee 29 May 2020
Premier Li Keqiang says stabilizing the Chinese economy is a contribution to the world and that the mainland is not immune from the economic shock brought about by the pandemic.
Li yesterday promised more support if the economy faced further disruption during his once-a-year news conference following the close of the annual meeting of parliament.
He pointed out that 70 percent of the funds in China's stimulus package will go to small and medium enterprises and spur consumption by issuing bonds, cutting taxes and creating jobs.
The central government will also cut non-obligatory expenditures by 50 percent.
"The money saved will be primarily used to support companies and people's basic living needs," Li said.
He also stressed the focus of policymaking had shifted toward ensuring stability in employment, financial operations, foreign trade, foreign investment, domestic investment and market expectations.
China does not need a massive stimulus, but growth remains important, and liquidity will be increased because "exceptional situations call for exceptional measures," he said.
"Just as water is important to fish farming, sufficient liquidity is important to economic development."
Using a Chinese idiom used to describe people taking advantage of a chaotic time to create confusion for their own benefit, Li added: "But excessive liquidity will induce froth in the marketplace where some people may attempt to muddy the waters and fish for arbitrage." Li said the failure to set a numerical growth target, which was "practical and realistic," did not mean economic development was unimportant, as China is not immune from the economic shocks.
"We are in a strong position to quickly introduce new measures should the situation call for it without any hesitation," he said.
Li also highlighted the opportunities China offers to foreign businesses in the wake of the shock to the global economy.
He said China is integrated into the global economy, which has been dealt a hard blow by the coronavirus outbreak.
Li hopes the Regional Comprehensive Economic Partnership can be signed this year, as agreed by member countries last year. He said Beijing is also promoting the China-Japan-South Korea free trade agreement.
RCEP brings together the 10-member Association of Southeast Asian Nations, China, Japan, South Korea, Australia and New Zealand.