China’s once “robust” economy. Then Covid came back
China, which once boasted a strong defense against the COVID-19 pandemic, is now being hit hard by the virus’ return.
Consumer spending and industrial production fell last month, while growth in infrastructure investment that Beijing touts to support growth this year also slowed, according to China’s National Bureau of Statistics.
According to the Policy Research Group (POREG), the overall unemployment rate hit a two-year high of 6.1%, further evidence of the economic fallout caused by the country’s strictest pandemic protocols.
The think tank pointed out that China’s stimulus since the pandemic first erupted a few years ago has mostly been concentrated on the supply side.
As China grapples with the huge economic impact of the virus, Chinese Premier Li Keqiang has called for an acceleration of the pace and greater efforts in implementing macro policies.
Li, also a member of the Standing Committee of the Political Bureau of the Communist Party of China Central Committee, made the remarks last week while presiding over a symposium on stabilizing growth held in Yunnan province.
According to Xinhua News Agency, he highlighted efforts to stabilize the growth of market entities and consolidate people’s employment and basic livelihoods, supported by stable growth.
Noting that the new wave of domestic COVID-19 resurgences and changes in the international situation have put additional downward pressure on the economy, Li stressed the importance of confidence, citing the more than 150 million of China’s market entities, strong resilience and generally stable prices.
“We have always insisted on avoiding ‘flood-like’ stimulus. We did not issue excess paper money, even when COVID-19 hit us hardest in 2020,” Li said. , adding that there was still political room for maneuver in the face of new challenges.
He stressed the importance of efforts to more effectively coordinate the fight against COVID-19 with economic and social development, and the importance of stepping up macro-regulation.
As most of the policies introduced by the Central Conference on Economic Work and Government Work Report were implemented in the first half of 2022, Li called on local governments to come up with more measures in May, so as to get the economy back on track quickly.
The country should ensure the full implementation of its relief measures, including tax cuts and refunds, so that businesses can receive prompt and comprehensive policy support, Li said.
On stabilizing the economy, the Chinese premier said the country should ensure adequate grain production and energy supply, and maintain stability in prices and all factors underpinning economic development.
Obstacles in logistics and upstream-downstream connections should be removed to smooth industrial and supply chains, Li said.