Chinese economy is some ways is worse than in 2020 – a time when the pandemic first started, Premier Li Keqiang said, urging efforts to reduce a soaring unemployment rate.
Li at an emergency meeting with thousands of representatives from local governments, state-owned companies and financial firms on stabilising the economy said, “Economic indicators in China have fallen significantly, and difficulties in some aspects and to a certain extent are greater than when the epidemic hit us severely in 2020,” .
In 2020 China’s full-year growth was 2.2%.
The development adds to the expectations that Beijing may admit to missing its GDP target by a large margin this year amid its zero-COVID policies in place. According to Bloomberg, the country’s GDP is expected to grow by 4.5% this year which is below government’s target of about 5.5%.
The premier called on officials to ensure unemployment falls and the economy “operates in a reasonable range” in the second quarter of this year, state media cited him as saying. The nation’s surveyed jobless rate climbed to 6.1 per cent in April, the highest since February 2020. Official data for April showed industrial output contracting for the first time since 2020.
“The economy is at its most grim moment since the second quarter of 2020,” said Bruce Pang, head of macro and strategy research at China Renaissance Securities Hong Kong as reported by Bloomberg.
“The meeting was not intended to announce more policy measures, but instead to strengthen the consensus, flesh out the details and urge the implementation of policies to ensure all existing policies are taking effect.”
Li’s emphasis on growth in the second quarter may be an “implicit acknowledgement” that the growth target set in early March will be “challenging”, Goldman Sachs Group economists wrote in a note.
“Chinese policymakers are in greater urgency to support the economy after the very weak activity growth in April, anaemic recovery month-to-date in May, and continued increases in unemployment rates.”
