China GDP: Premier Li signals ‘clear urgency’ on reviving economy, but no change to zero-Covid

A speech from Premier Li Keqiang to 100,000 officials from across China shows ‘a clear urgency’ to government efforts to avoid recession, say analysts

But Li’s comments do not signal a change in the zero-Covid policy, which has locked down cities and led to an outcry from foreign investors and citizens

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Premier Li Keqiang has admitted that China may miss the economic growth target of “around 5.5 per cent” that Beijing laid out earlier this year. Photo: Xinhua

Published: 7:00am, 27 May 2022Updated: 7:08am, 27 May 2022

Premier Li Keqiang’s honest assessment of the stress facing China’s economy and rare warning of a potential contraction in the second quarter after two months of zero-Covid containment show Beijing is stepping up efforts to stabilise the economy, analysts say.

Li’s video conference with more than 100,000 government cadres on Wednesday also reinforced the pressure Beijing is putting on local authorities to prevent economic growth losing momentum.

Earlier in the week, the State Council, China’s cabinet, unveiled a package of 33 policies to support the economy, including fast tracking infrastructure projects and loan extensions for business, increasing tax breaks and rebates, encouraging car sales, and adding support policies by the end of this month.

“The premier’s urgings could result in more aggressive efforts by local governments to help companies resume normal operation, which have so far been hamstrung by the continued cautious approach toward Covid-19,” Andrew Batson and Wei He, analysts with Gavekal Dragonomics, said in a note on Thursday.

The conference was attended by all four vice-premiers and four state councillors, the central bank governor, chairman of the top economic planning commission, as well as tens of thousands county-level cadres.