Foundation of China’s economic recovery not solid enough, says party official

BEIJING – The foundation of China’s economic recovery is not solid enough, a senior Communist Party official said on Saturday, warning of possible spillover effects from global economic problems.

Some countries have to play a balancing act as they try to stabilise their economies, prices and financial markets, said Mr Han Wenxiu, deputy head of the party’s office for financial and economic affairs, adding that the global economy was at risk of stagflation.

Such risks come as many developed countries aggressively tighten their monetary policy causing problems for banks as well as bringing foreign debt woes and financial market turmoil, he said at a government-organised China Development Forum, without naming any specific countries.

As a result, global supply chains face restructuring, he said.

“The foundation of China’s economic recovery is not yet solid enough,” Mr Han said.

Recent economic data has shown that China’s economy picked up from Covid-19 slumps after the government abandoned its zero-Covid strategy late in 2022.

China is confident of reaching its annual economic growth target of around 5 per cent, Mr Han said.

He said the growth target took into account the need to expand employment and improve people’s livelihoods, as well as the potential growth capacity and various difficulties.

China has no apparent inflation or deflation at the moment, and it has a relatively large amount of room to manoeuvre on monetary policy, he said.

Mr Han also said China would continue to expand market access and welcome foreign investment into the world’s second-largest economy.

“China welcomes companies from all countries to come and invest and expects foreign firms to hold a long-term view and develop extensively in the market,” Mr Han said. REUTERS