BEIJING – China will strengthen the coordination of various policies to boost growth and meet its 2023 economic target, according to a Cabinet meeting cited by state media on Wednesday.
The meeting held on Wednesday comes amid China’s mounting economic woes, with a prolonged property crisis, deflationary pressure and slower growth in retail sales and industrial output.
Tuesday’s grim data has raised calls from China watchers for the authorities to roll out major fiscal stimulus to get the economy back on more solid footing.
Without giving details, the Cabinet meeting chaired by Premier Li Qiang said China would continue to introduce policies to boost consumption and promote investment.
Economists see a downside trend for the world’s second-biggest economy. Barclays was among a number of global banks to cut their forecasts for China’s 2023 growth after weak activity data.
Beijing pledged to boost the household consumption share of gross domestic product to prop up economic growth, as debt-fuelled investment in infrastructure and property has peaked and exports have slumped because of weakening global demand.
However, despite a slew of policy announcements about how to boost growth, without direct stimulus such as consumer vouchers and tax cuts, Chinese households have continued to build up savings and reduce borrowing – meaning that demand remains sluggish.
“Prolonged weakness in property construction will add to destocking pressures in the industrial space and depress consumption demand as well,” said Dr Tao Wang, economist at UBS Investment Bank.
“In such a case, economic momentum may stay subdued in the rest of the year and China may miss this year’s growth target of around 5 per cent.”
In the United States, when pressed on Wednesday about recent Chinese growth, the White House said there were issues with the transparency of economic data issued by Beijing.
“We have all seen the reports of the economic weakness in China… and, as we’ve said many times before, there have also been transparency issues as we know when it comes to (China) and on the economic data, specifically,” spokesman Karine Jean-Pierre told a briefing. REUTERS
