Chinese Vice-Premier Liu He says ‘external pressure’ can actually help China’s economy

President Xi Jinping’s chief US trade war negotiator did not specifically reference rising tensions with United States during surprise speech in Shanghai

Keynote address at Lujiazui financial forum his first public appearance in three weeks since tour of Jiangxi province with Xi

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The keynote address by Liu He (second left) at the Lujiazui financial forum in Shanghai on Thursday was his first public appearance in three weeks. Photo: Xinhua

Published: 1:01pm, 13 Jun 2019Updated: 3:56pm, 18 Jun 2019

Vice-Premier Liu He believes the “external pressure” now hitting China’s economy was inevitable and could actually boost the country’s innovation and development.

Liu, the top economic aide to President Xi Jinping and chief negotiator in the trade talks with the United States, backed up comments last week from People’s Bank of China governor Yi Gang that Beijing has sufficient policy tools to address the risks and challenges to ensure that China’s long-term growth prospects remain sound.

He did not directly mention the US-China trade war in remarks at the Lujiazui financial forum on Thursday, but said that there was ample room in China’s macroeconomic system to support growth and that recent moves by the government to cut taxes and government administrative fees were starting to have a positive impact on the economy.

“We do face some external pressure at the moment, but this is the inevitable test that China’s economic upgrade must experience,” Liu told the forum, which is an annual event organised by the Shanghai government and the People’s Bank of China. “The external pressure will help us improve innovation and self-development, speed up reform and opening up and push forward with high quality growth.”

Liu was critical of economists for focusing solely on monthly economic data that has shown signs of weakness in the Chinese economy, while neglecting positive trends that support long-term growth in the world’s second largest economy.

Chinese employment, consumer prices and the balance of payment remained at “reasonable” levels, he said, although China’s consumer price index did rise to the highest level in 15 months in May, partly because of the rising price of pork and fresh fruit.