China rules out ‘excessive stimulus’ to save economy, but Li Keqiang vows to refine coronavirus policy

Premier Li Keqiang tells World Economic Forum that China will not employ large-scale stimulus to hit economic growth targets, but will adjust coronavirus policy

His comments to international business leaders come amid fresh concern about the economic toll of zero Covid and frustration among foreign firms in China

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China’s economy grew by 0.4 per cent in the second quarter, compared with a year earlier, down from the 4.8 per cent growth seen in the first three months of the year. Photo: AFP

Published: 7:00pm, 20 Jul 2022Updated: 3:11am, 21 Jul 2022

China has sent a clear signal that large-scale stimulus will not be employed to hit its growth goal this year, but it will maintain targeted macro policies, while refining coronavirus controls to soothe foreign investor fears.

“We won’t resort to super large stimulus or excessive money printing to accomplish a high growth target. That will overdraw on the future,” Premier Li Keqiang said on Tuesday at a virtual dialogue hosted by the World Economic Forum with nearly 400 global business leaders.

“We’ll try our best to achieve good results this year.”

Li’s comments come amid fresh concern about the toll of Beijing’s zero-Covid policy on the world’s second largest economy, with growth slumping to 0.4 per cent year on year in the second quarter and foreign companies becoming more frustrated with virus restrictions.

Li’s speech could set the tone for China’s quarterly Politburo meeting, which is expected to be held next week to discuss the economy.

Tuesday’s event was attended by executives from some of the world’s biggest companies, including Airbus CEO Guillaume Faury, and Jian Lu, president of LinkedIn China. Business leaders expressed concern about the state of China-US relations, climate change, manufacturing prospects and China’s consumption policies.

Li, China’s No 2 political figure, said the government will adjust its coronavirus control measures to be more targeted and well-calibrated, promising to improve visa access, testing policies and increase international flights.