Chinese Prime Minister: Economic risks are not too serious right now

Prime Minister Li Qiang calmed investors' concerns about risks in real estate and local government debt, and said China would increase support policies.

At the China Development Forum on March 24, Mr. Li said they still have a lot of room for macro policy, because inflation is currently "relatively low" and government debt is not high. He said demand in China "remains weak".

Mr. Ly admitted that many investors are currently concerned about risks in the real estate sector and local government debt. However, he said that "some difficulties and problems are not as serious as people think".

The Chinese Prime Minister said their efforts to limit risks in these areas have been effective.

Chinese general Li Qiang at the event on March 24. Photo: Reuters

Since the beginning of the year, the world's second largest economy has received many positive figures. Exports, industrial production, investment... exceeded forecasts. This reduces the pressure on officials to add economic stimulus policies in the short term. However, economists believe that the country needs more policy support to achieve its growth target of around 5% this year.

In the long term, China faces many challenges, from the longest deflationary streak since the 1990s, the real estate crisis to declining foreign investor confidence.

Last year, new foreign direct investment (FDI) into the country fell to a 30-year low. The cause is geopolitical tensions and higher external interest rates. This year, Chinese officials pledged to focus on attracting foreign capital.

At yesterday's forum, Director of the International Monetary Fund (IMF) Kristalina Georgieva said China's GDP could increase sharply in the next 15 years, if they implement widespread reforms, including real estate and domestic consumption. location, investment environment, policy framework and electricity prices.

"With comprehensive reform, China could grow significantly faster," she said. The IMF estimates that China's GDP could increase by $3,500 billion if reformed.

Prime Minister Lee introduced several policies that the country's officials plan to implement to boost domestic demand this year. That is, reducing barriers when entering the domestic market, granting urban household registration to rural migrants, as well as encouraging consumers and businesses to replace old appliances and equipment.

He also emphasized that China is focusing on developing advanced technology. New growth drivers are consolidated. Loan interest rates will decrease further. The Chinese Prime Minister affirmed that the country will not accept long-term risks in exchange for short-term growth.