ECONOMY

China's economy growing at 'reasonable' pace despite challenges: Premier Li Keqiang

Authorities well able to tackle challenges the economy faces, says premier

PUBLISHED : Sunday, 30 August, 2015, 10:43pm
UPDATED : Sunday, 30 August, 2015, 10:43pm

The mainland economy is growing at a "reasonable" pace and, despite growing pressure, the government can handle well the risks the country faces, Premier Li Keqiang says.

The premier, in remarks published late on Saturday after a special cabinet meeting, said the mainland was continuing to steadily manage its economy.

Li said international market instability had "increased the uncertainties around the global economic recovery, and the impact on China's financial market and imports and exports has also deepened, with the economy facing new pressure".

He defended the country's efforts to steer through a volatile period since mid-June, when its stock market plunged. On Friday, Shanghai's benchmark index was nearly 38 per cent below where it was on June 12.

The premier reiterated earlier remarks that there was no basis for continued depreciation of the yuan after its devaluation on August 11. The yuan "will stay basically stable at a reasonable and balanced level", he said.

Li said recent cuts in the reserve requirement ratio, interest rates, taxes, fees and measures aimed at stabilising the market were already paying off.

Analysts say further measures are necessary to support the economy and calm markets.

Mainland economic growth, which in the past has been in double digits, is slowing.

The mainland government reported that annual growth in the second quarter was 7 per cent - a figure some economists doubt.

Li said the country would "enact more targeted and responsive macro-regulation to offset downward economic pressure, more robust reform and innovation efforts to energize the market, and more effective delivery to secure the positive momentum for growth".

He said the nation needed to encourage new forms of investment and financing by local governments and businesses.

He reiterated the role of an open, transparent capital market, but said risk management had to be improved to prevent regional or systemic risks.

"China has great potential for further development and is well capable of effectively managing risks and keeping them under control," Li said.