EditorialLi stays on message of confidence in countering slowdown
- Premier focuses on tax cuts which are the key to the leadership’s strategy for maintaining growth and stability
- But if the plan is to work, officials will have to deal with local resistance and entrenched interest groups that have been difficult to overcome in the past
The premier’s international press conference remains keenly awaited even after marathon sessions of China’s national parliament and political advisory body.
The questions may be preselected and uncontroversial but their direction can show where the policy focus is. That Li Keqiang gave the call yesterday to many journalists who asked about the economy and stability is a good example of that.
He admitted the economy continues to face downward pressure, but did not miss the opportunity to emphasise the leadership’s confidence that it had enough tools to counter it without resorting to debt-fuelled quantitative easing.
Instead, he focused on the tax cuts to boost business and consumption which were showcased in his government work report at the opening session of the National People’s Congress, and on reducing red tape that inhibits reform and innovation. In that regard he stayed on message and in the right direction.
The economic slowdown is relative. It originates from a high base and leaves China with a planned growth rate of 6-6.5 per cent that is the envy of most countries. But it is real enough to a society that not long ago was used to much higher growth rates.
The bottom line at this time is to ensure social and political stability. If China can remain stable, it can ride out the storm and gradually restructure its economy.