China will strive for positive economic growth this year – Premier Li

FILE PHOTO: Chinese Premier Li Keqiang delivers a speech at the opening session of the National People’s Congress (NPC) at the Great Hall of the People in Beijing, China May 22, 2020. REUTERS/Carlos Garcia Rawlins

BEIJING (Reuters) – China will strive for positive economic growth to recover from the impact of the coronavirus pandemic this year, despite not setting a growth target, Premier Li Keqiang said on Thursday, promising more support if the economy faced further disruption.

“We have reserved policy room. Be it fiscal, finance, or social security,” Li said during his once-a-year news conference following the close of the annual meeting of parliament.

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 in response to a question from Reuters.

Investors have been expecting Beijing to roll out a large stimulus measures to pull the world’s second-largest economy out of an unprecedented downturn, and some were disappointed at the unusual decision not to set a growth target.

Li stressed the focus of policymaking had shifted towards ensuring stability in employment, financial operations, foreign trade, foreign investment, domestic investment, and market expectations.

“We can introduce new policies in a timely manner, and we will not hesitate to maintain the stable operation of the Chinese economy, which is paramount,” the premier said.

The government has pledged more government spending and an fiscal deficit target of at least 3.6% of GDP. Based on fiscal measures announced so far, the stimulus the government plans to roll out is equivalent to about 4.1% of China’s GDP, according to Reuters calculations.

Reporting by Ryan Woo and Kevin Yao; Writing by Stella Qiu and Yawen Chen; Editing by Simon Cameron-Moore

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