China pursues challenging path: Premier

Nation has leeway, tools to respond to changing conditions

China’s economy can achieve positive growth this year if security in six key areas including job creation, basic living needs and the operations of market entities can be maintained, Premier Li Keqiang said on Thursday, reassuring the markets of the nation’s ability to carve out a challenging path to economic revival after it puts Covid-19 under control.

Speaking at a press conference at the conclusion of the annual session of the nation’s top legislature, Li stated that China didn’t set a quantitative target for GDP growth this year, which was a decision based on the facts and reality.

The national legislature also approved a resolution on the annual government work report on Thursday, which abandoned a growth target for 2020 for the first time in decades.

If the economy and other fields see big changes, China will still have policy leeway to respond, whether it’s on the fiscal, financial or social security front. The nation will not hesitate to move swiftly to introduce new support policies to back up the economy, the premier said.

He noted that maintaining the economy’s stable operation is of utmost importance. The premier reiterated, however, that China won’t resort to a flood of stimulus, while saying special policies are required during special times, which he referred to as “letting out water for fish farming.”

“If there’s insufficient water, fish cannot survive; while a flood would create bubbles, leading to fishing in troubled waters,” Li said, calling for a targeted approach to shore up the economy.

The premier’s statement signifies that the central government takes both short-term challenges and long-term structural adjustment into consideration, as expanding investment in new types of infrastructure has been repeatedly stressed for industrial upgrading, Cong Yi, a professor at the Tianjin University of Finance and Economics, told the Global Times.

China has plenty of policy tools to deal with the challenges caused by the global pandemic and rising trade protectionism and the country has huge space for market-oriented reform, Cong reckoned.

To shield the economy from the Covid-19 fallout, the authorities should maintain a proactive fiscal policy and relatively loose monetary policy to increase government investment in sectors like new hightech infrastructure, and raise per capita disposable incomes and corporate profits by cutting taxes and fees, according to Yu Miaojie, deputy dean of the National School of Development at Peking University.

As the premier put it, China needs to be creative in policymaking. The rollout of largescale measures focuses on bailing out businesses, spurring market vitality, stabilizing employment and ensuring people’s livelihoods, as opposed to relying on infrastructure investment.

Pledging to increase investment, Li said that newly issued local government specialpurpose bonds, added to some treasury bonds, total 2 trillion yuan ($279.4 billion), accounting for 20-30 percent of the large-scale relief package. New infrastructure is among the nation’s investment priorities.

Remarks by the premier at one of the year’s most-watched press conferences inspired optimism on the outlook for the economy.

“We should increase confidence and not be frightened by some Western reports badmouthing China’s economic and social development. China still has many opportunities,” Cong said.

Yu said in order to attract more foreign investment, the country should further optimize the domestic business climate and continue its openingup policy.