Premier promises stabilized growth

Updated: 2014-05-29 01:46

By LAN LAN (China Daily)

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China is moving to stabilize growth momentum to achieve key targets for social and economic development this year, Premier Li Keqiang said on Wednesday.

At a meeting in Beijing with Klaus Schwab, executive chairman of the World Economic Forum, Li said action was being taken for what he described as "timely and moderate pro-cyclical fine-tuning" of the country's economic policies.

Economists said Li's comments shed light on the bottom line for policy in a series of recent central government initiatives to increase investment in public infrastructure and credit for small enterprises.

The premier said fundamental fiscal and monetary policies would remain largely intact, while many political and monetary instruments could be used by the government to fine-tune policies.

This fine-tuning was aimed at providing greater incentives for more people at a time when the economy was still facing downward pressure, Li said.

The world's second-largest economy has set a target for economic growth to remain at about 7.5 percent in 2014. Growth slowed to an 18-month low of 7.4 percent in the first quarter.

Some economists estimate that the country's economic growth may decline further in the second quarter and that the government may roll out support policies.

Zhao Xijun, deputy dean of the School of Finance at Renmin University of China, said Li's remarks on pro-cyclical policy fine-tuning were a positive signal and would boost investors' confidence.

Commenting on the policy and monetary instruments the government could use, Zhao said many of these had been placed in pilot programs and tested in past years.

The more important thing was their coordination, because there were no "one-size-fits-all solutions," he said.

A reduction in the commercial banks' reserve requirement ratio may be considered, Zhao said.

He added that major concerns should be considered carefully when launching new policies, such as creating sufficient jobs for graduates and rural migrants moving to cities, increasing income — especially that of local governments that originally relied heavily on land sales — and helping to avoid financial situations such as last year's cash flow shortage.

During the meeting, Li said China's economy had largely been running smoothly against the backdrop of a complex external situation, and recent reform policies had resulted in positive changes.

Li Xiaokun contributed to this story.