China’s No. 2 leader Tuesday said that economic growth sped up in the latest quarter and expressed confidence it can hit the ruling Communist Party’s official target of 5% for the year.
Premier Li Qiang, speaking at a conference in the eastern city of Tianjin, gave no figure for the three months ending in June but said it was faster than the previous quarter’s 4.5%.
The world’s second-largest economy rebounded from 2022’s unusually weak 3% growth following the end of anti-virus controls on travel and business activity. But that faded faster than expected. Consumer and factory activity weakened in May and record-setting youth unemployment spiked up.
"It is expected that the second quarter will be faster than the first quarter," Li said at the World Economic Forum (WEF). "We expect to achieve the economic growth rate of about 5% determined at the start of the year."
Private sector forecasters expect China’s economic output to grow by at least 5% this year, but some have cut their outlooks following May’s weak activity.
Chinese leader Xi Jinping’s government appears to be avoiding a large-scale economic stimulus to prevent another rise in debt Beijing worries is dangerously high.
Growth in retail sales decelerated in May to 12.7% over a year earlier, from the previous month’s 18.4%. Growth in factory output fell after interest rate hikes in the United States and Europe to cool inflation-depressed demand for Chinese goods. The May exports sank compared with a year earlier.
A government survey found unemployment among young people in cities spiked to a record 20.8%.
Politicizing economic relations
Meanwhile, the Chinese premier has also rejected the debate about reducing economic dependencies on China, and instead called for increased cooperation. The premier warned against politicizing economic relations in the world, at the conference known as the "Summer Davos."
"Some in the West are hyping up the so-called phraseologies of reducing dependencies and derisking," Li said.
"These two concepts are false propositions, as economic globalization has already made the world economy an integral whole where everyone's interests are closely intertwined, countries are interdependent, interconnected on each other," he said.
Politics should stay out of the trade, he said. If there are risks in certain industries, companies are in the best position to assess them, Li added.
"They should be left to come to their own conclusion and make their own choice. Governments and relevant organizations should not overreach themselves, still, less overstretch the concept of risk or turn it into an ideological tool."