China plans measures to consolidate economic growth momentum: cabinet meeting

CHINA’S economy is stabilising and improving but still faces many challenges, Premier Li Keqiang was quoted by state media as saying at a cabinet meeting on Wednesday (Feb 22).

China will take measures to improve market expectations and consolidate economic growth momentum, and there is still room for tax and fee cuts to take effect, said Li.

The world’s second largest economy grew 3 per cent in 2022 from a year earlier, badly missing the official target of around 5.5 per cent and recording one of its worst rates in nearly half a century.

Beijing’s lifting of stringent anti-Covid measures in December has boosted a tentative economic revival this year, but a property slump and weak global demand also mean a rebound in growth will be heavily reliant on consumers.

Markets widely anticipate a government reshuffle, especially of the economic team, and economic targets for 2023 during an annual session of parliament kicking off in early March.

“We believe 5 per cent will remain this year’s growth target, though in practice 5 per cent is perhaps now being interpreted as a minimum,” JPMorgan said in a research note. It expected monetary policy “to be continuous and maintain the status quo, and fiscal policy to be modestly contractionary this year”. REUTERS