Beijing (AFP) – China’s economy is facing growing “uncertainty” in the international environment, as well as insufficient domestic demand, a top official said on Thursday, as Beijing vowed to boost spending and cut rates to lift flagging growth. Beijing set an ambitious annual growth target of around five percent this week, vowing to make domestic demand its main economic driver as an escalating trade war with the United States hit exports.
US President Donald Trump imposed more blanket tariffs on Chinese imports this week, following a similar move last month. However, China has “full confidence” that it can reach its growth goal this year, Zheng Shanjie, Chairman of China’s National Development and Reform Commission, told a news conference. “We have the basic support and guarantee of achieving this year’s growth target of around five percent,” said Zheng, Beijing’s top economic planner, adding his “full confidence in this.”
Speaking on the sidelines of Beijing’s annual “Two Sessions” political meetings, Zheng acknowledged that “uncertainty in the external environment is further increasing.” “We are also facing some problems such as insufficient domestic demand, production and operation difficulties in some industries and some enterprises,” he said. “However, we feel that these difficulties and challenges are in the process of development and progress, and they can all be overcome and solved,” Zheng added.
China’s headline growth figure, announced by Premier Li Qiang on Wednesday at an annual Communist Party conclave, was broadly in line with an AFP survey of analysts. But experts say it is ambitious considering the scale of China’s economic challenges — and are hoping officials will unveil further economic support this week.
– Spending to expand –
On Thursday, central bank chief Pan Gongsheng said the country would cut interest rates further this year “as appropriate, based on domestic and international economic and financial situations.” Beijing’s central bank cut two key interest rates to historic lows in October. Finance Minister Lan Fo’an vowed Thursday to “further expand” fiscal spending in 2025. That, he said, would promote “the sustainable and healthy development of the economy and society.”
The world’s second-largest economy has struggled to regain its footing since the Covid-19 pandemic, as domestic consumption flags and a persistent debt crisis in the vast property sector drags on. Trump’s latest round of tariffs has added to the hurdles China faces. Those levies are expected to hit hundreds of billions of dollars in total trade between the world’s two largest economies.
Beijing announced its own measures on Tuesday in retaliation to Washington’s latest tariff hike and vowed it would fight a trade war to the “bitter end.” The moves will see China impose levies of up to 15 percent on a range of US agricultural products including soybeans, pork, and wheat starting from early next week.
© 2024 AFP
