China GDP: economic growth likely to ‘fall far short’, premier admits as crisis concerns mount

Li Keqiang instructs more than 100,000 officials from across China to use whatever resources they have to stabilise the economy as zero-Covid policy remains in effect

But analysts say monetary policy still hasn’t changed much, as Li ‘may have just laid the groundwork for abandoning this year’s GDP growth target’ of around 5.5 per cent

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Premier Li Keqiang says a realistic target for the year’s second quarter is simply to get the economy back on a growth trajectory. Photo: Xinhua

Published: 1:34pm, 26 May 2022Updated: 5:43pm, 26 May 2022

Premier Li Keqiang has conceded that China’s economy is stalling at a dangerous rate and faces critical risks, as he instructed an army of officials from across the country to exhaust all measures to stabilise the economy.

And for the first time, Li admitted that China may miss the “around 5.5 per cent” economic growth target that Beijing laid out earlier this year, according to a transcript of his speech on Wednesday that was verified by officials who attended the meeting.

Speaking candidly during a national teleconference to more than 100,000 bureaucrats – from the State Council to county-level authorities – Li said a realistic target for the year’s second quarter is simply to get the economy back on a growth trajectory.

“We should take efforts to ensure positive economic growth for the second quarter. The target is not high, and it falls far short of the 5.5 growth target set out earlier this year,” Li said, according to the transcript.

However, some experts said that the support policies mentioned at the meeting continued to fall short of expectations. There was little word of fine-tuning the nation’s zero-Covid strategy, but Li did stress that “Covid prevention and control need guaranteed financial and material resources”.

“The economic impact has already begun to hit our fiscal revenue,” Li said, underscoring the serious pressure that some provincial-level governments are now under, according to a transcript of the meeting seen by the Post. Some local authorities have also asked the State Council for permission to “borrow money”.

Li also revealed that some parts of the Yangtze River Delta region – the growth engine of China that remains affected by lockdowns in Shanghai – reported a staggering fall of 32 per cent in government revenue in April, while the average decline nationwide was nearly 6 per cent.