China’s economic performance ‘stable’ says premier

Government plans to stick with strategy of targeted policy support

China's economic performance is stable so far this year and the government will stick with its current strategy of targeted, limited policy support, Premier Li Keqiang said.

"China's sound economic performance is not a result of quantitative easing or massive stimulus," Mr Li said Thursday in a speech at the Boao Forum for Asia on the Chinese island of Hainan. "Some fluctuations in economic growth from month to month or quarter to quarter are hardly avoidable. Nevertheless we'll carry on with our policies as long as the major economic indicators are kept within an appropriate range for the whole year."

The government this month unveiled a record 2 trillion yuan tax cut and has worked since last year to improve the supply of credit to small businesses and the private sector. While signs of stabilisation in the local economy continue to appear, the US-China trade war remains a major source of uncertainty. Negotiations continue in Beijing from Thursday.

Mr Li was upbeat on the domestic outlook, although he sounded a warning on the global economy. Concerns that the the world economy is entering a downturn are multiplying amid signs that trade is being hammered due to recession fears in Europe and China's own slowdown.

“Global trade and investment are lacklustre, and protectionism is on the rise,” Mr Li said. “The global economy is losing momentum. There are a lot of uncertainties, and market confidence has been impacted.”

Mr Li said that his government was now working to implement a new foreign-investment law passed this month, which seeks to address some of the concerns about access to the Chinese market that have fueled US complaints. China planned to abolish all laws that contradict the new investment code, and draft regulations on its implementation by year-end, he said. – Bloomberg