China’s economy is still in the “recovery stage” and the nation will need to “appropriately” ramp up support to achieve the government’s growth target of around 5% this year, the former central bank chief Yi Gang said.
(Bloomberg) — China’s economy is still in the “recovery stage” and the nation will need to “appropriately” ramp up support to achieve the government’s growth target of around 5% this year, the former central bank chief Yi Gang said.
Yi — who was governor of the People’s Bank of China until earlier this year — said “we must have confidence and patience” as the economy continues to recover, according to remarks carried this week by the official paper affiliated with the Chinese People’s Political Consultative Conference, the nation’s top political advisory body.
“If you look at the rest of the world, it took about a year for consumption to basically recover after the pandemic — but it’s only been half a year in China,” Yi said.
Yi’s comments come as policymakers in China weigh the effectiveness of measures taken so far to shore up growth in the world’s second-largest economy. Some areas have shown signs of stabilization in recent weeks, with heftier stimulus boosting consumer spending and factory output.
But weak confidence and an ongoing property crisis remain massive overhangs. Economists have downgraded their economic forecasts, raising questions about whether the official growth goal is at risk.
People in China will gradually spend more, helping generate more income and consumption, Yi said. Even so, he noted that the recovery “has slowed down since the second quarter,” citing manufacturing surveys that still show the sector in contraction.
Given those issues and weak market confidence, Yi recommended “appropriately increasing” macroeconomic policies, “effectively supporting” the expansion of domestic demand and “promoting a virtuous economic cycle.”
Authorities in China have signaled a focus on the recovery after the Politburo — the ruling Communist Party’s top decision-making body — in July signaled more support to shore up growth and help the real estate sector.
On Wednesday, China’s leaders pledged to coordinate planning for the economy into 2024 and pushed authorities to accelerate the adoption of policies to support the nation’s recovery.
The State Council — China’s Cabinet — met to assess a report on “the supervision and research” to promote the economy’s sustained recovery, according to the official Xinhua News Agency. The regular meeting was chaired by Premier Li Qiang.
Based on suggestions collected for that report, authorities called for relevant departments to “coordinate and conduct in-depth research on the planning of next year’s economic work” and “accelerate” the introduction of policies as they consolidate the economic recovery.
–With assistance from Li Liu.
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