China acknowledges ‘difficulties’ in development policy

ISTANBUL

In a rare acknowledgment of “difficulties” in its developmental policy, China’s Prime Minister Li Keqiang has sought solutions from officials on “how to stabilize the economy.”

Li issued directions on Wednesday night during a meeting of the State Council, a top government body.

The premier asked officials to submit “details on how to implement the policies aimed at stabilizing the economy.”

Such details, Li emphasized, “must be sorted out before the end of May.”

“The government is facing difficulties in development, some of which are more serious than those in 2020, when the COVID-19 pandemic hit,” Li told the meeting, according to Chinese public broadcaster CGTN.

He, however, added: “Development is the key to solving all current problems.”

The latest revelation comes after China last week announced to cut key interest rate for long-term loans for the second time this year, part of a push to overcome the impact of stringent COVID-19 lockdowns and a downturn in the property sector.

The five-year loan prime rate, a reference for mortgages, was lowered by 15 basis points from 4.6% to 4.45%, the People’s Bank of China said.

This was the largest cut since the rate was revamped in 2019.

China is also witnessing capital outflow at a rapid pace in recent months, putting pressure on local currency and developmental projects.

“In order to make sure the half-year targets are met,” Li called for “balancing” economic development and COVID-19 control which “safeguards” employment and “running of market entities.”

“Resolving the current dilemmas is a test of government’s abilities,” he said, urging local governments to “employ all possible methods to help enterprises.”

“The State Council will inspect the implementation of policies,” Li said.

He added: “The National Bureau of Statistics will disclose the second-quarter rates economic parameters according to law.”

Beijing's second-quarter target of 5.5% growth this year, many observers say, may fall short due to a crisis triggered by the Zero-COVID policy during which China imposed a lockdown in many regions, badly impacting factories and other economic powerhouses.