China’s economy is recovering but foundations are not solid, says PM

BEIJING (Reuters) – China’s economy has recovered to some extent, but its foundations are not solid, state media said on Tuesday (June 28th), citing Prime Minister Li Keqiang.

China will strive to return the economy to a normal path and bring down the unemployment rate as soon as possible, Li said.

“Currently, the implementation of the package of measures to stabilize the economy is accelerating and taking effect. The economy has generally recovered, but the foundation is not yet solid,” Li said.

“The task of stabilizing employment remains daunting.”

China’s economy showed signs of recovery in May after slumping the previous month as industrial production resumed, but consumption remained weak and underscored the challenge for policymakers amid the continued drag on restrictions restrictions of COVID-19.

China’s survey-based national unemployment rate fell to 5.9% in May from 6.1% in April, still above the government’s 2022 target of less than 5.5%.

In particular, the registered unemployment rate in 31 major cities reached 6.9%, the highest rate ever recorded. Some economists expect employment to deteriorate before it improves, with record numbers of graduates entering the labor market in the summer.

Li promised to achieve reasonable economic growth in the second quarter, although some private sector economists expect the economy to contract in the April-June quarter from a year earlier, compared growth of 4.8% in the first quarter.

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