China’s premier pledges ‘decisive’ action to keep nation’s growth on track as economy slows

China’s government has the policy tools to bolster the nation’s economic growth and is fully resolved to use them, Premier Li Keqiang said.

The government will act decisively if there are signs that economic growth may slip out a “reasonable range”, Li said in comments published on a government website on Monday.

Li also alluded to the new Year of the Monkey and Chinese literature in his comments.

He said the government would not shy away from using its own “gold-banded cudgel” to keep growth on track, a reference to the magical weapon wielded by the Monkey King in the 16th-century Chinese novel the Journey to the West.

Li did not specify what policies he would adopt, but the message suggests Beijing will be more aggressive in trying to arrest a deepening slowdown.

Economic expansion decelerated to the lowest level in a quarter of century last year while imports and exports shrank further in January.

China’s economic growth target this year will be between 6.5 per cent to 7 per cent, Chinese media quoted Xu Shaoshi, the head of China’s economic planning agency, as saying earlier this month.

Chinese banks are already adopting a more aggressive stance to help businesses in China.

Chinese lenders handed out a record 2.51 trillion yuan (HK$3 trillion) in new loans in January, although the central bank has refrained from cutting interest rates or reserve ratios over the last three months to further boost lending.

“We still have many tools in our toolbox, but we must be prepared,” Li was quoted as saying. “All departments and divisions must make plans to face the difficulties.”

China’s economy is still fundamentally sound, according to Li, mainly because employment is stable.

He cited a jobless survey suggesting China’s unemployment rate in urban areas was only 4.99 per cent in January.

“As long as employment is stable, China’s economic fundamentals will be stable,” said Li. “That’s the biggest highlight of the Chinese economy in the past period of time.”

While Li put a brave face on the economic slowdown, he also heavily criticised some central and local government officials for not being industrious enough in carrying out their jobs and urged them to fully bear their responsibilities.

“You must engage yourself and be nervous and then urge your subordinates to act,” Li was quoted as saying.

He also referred to the government’s handling of the share and yuan currency markets and said government measures taken were “correct and conform with international practises”.

“We have defused some bombs within a short period of time and avoided systemic financial risks,” Li said. Problems remain with technical practises and internal controls, he added, without elaborating.

“At present, there’s great concern about Chinese economic and social development both at home and abroad, therefore, all ministers and heads of state council agencies should hold or attend press conferences to proactively face public enquiries,” said Li.

The premier’s comments on the economy were made at the first regular State Council meeting after the Lunar New Year holiday, the government website said.