Mixed signals on Chinese economy from the ‘authoritative’ figures at the top

Just hours after an “authoritative” figure quoted in People’s Daily criticised debt-fuelled growth in China’s economy, a statement appeared on the cabinet’s website in which Premier Li Keqiang said his government had refrained from “strong stimulus”.

Li said his government had been focused on structural reforms in recent years to address the slowdown in growth.

A day after Li’s statement on Monday, a transcription of a speech by President Xi Jinping, made in January, emerged in People’s Daily, presenting Xi’s vision of how supply-side structural reforms were key to the nation’s future.

China heading for big economic policy shift, says mystery ‘authoritative’ source in People’s Daily

“There are so many policy signals flying around these days,” Li Weisen, an economics professor at Fudan University in Shanghai, said. “One big voice is criticising stimulus … and then another big voice is denying any stimulus – it’s all quite puzzling and we have to wait and see.”

While policies by Beijing and market movements in Shanghai can send ripples across the world, some critics say analysing how China’s big economic decisions are made, and by whom, can be like “reading tea leaves”.

Guessing game: who is mystery ‘authoritative figure’ claiming major shift in China’s economic policy?

“It sounds nice to just rely on consensus, but at the end of the day … you want to know who the guys in charge are, you want to know what they think and how they are weighing up those views and opinions, and where they want to take this,” Louis Kuijs, chief Asia economist at Oxford Economics in Hong Kong, said. “At the moment, perhaps, there’s more uncertainty about where the leadership really stands.”