Update | Beijing rules out strong stimulus despite trade decline

Premier Li Keqiang has again ruled out strong stimulus to spur economic growth after the mainland posted worse-than-expected trade data, saying new momentum would be created through structural reforms.

Speaking to an international audience at the Boao Forum yesterday, Li reiterated there were "downside risks" in the economy. But he said: "We won't adopt short-term strong stimulus policies just because of temporary fluctuations in the economy. Instead, we will put more emphasis on promoting healthy development.

"The guidelines we have determined and the policy reserves we have will enable us to cope with all kinds of potential risks and challenges … We are able to and have confidence in keeping the economic operation in a reasonable range."

He reiterated remarks from last month that the central government's 7.5 per cent growth target for the economy this year would be flexible as long as enough jobs were created.

Mainland customs authorities reported yesterday that exports unexpectedly fell 6.6 per cent year on year last month, though narrowing from a sharp contraction of about 18 per cent in February. Imports declined 11.3 per cent, after rising 10.1 per cent in the previous month, partly due to falling commodities prices.

Analysts say Li's remarks indicate that Beijing is not overly worried about a slowdown, although more fine-tuning policies could be introduced in the event of a sharp slide.

"His speech was mainly aimed at bolstering confidence. Beijing may have set a bottom line for growth, which could be slightly lower than the official target," UBS Securities economist Wang Tao said. "The economic situation may not be bad enough to trigger any immediate bailout from the government."