Sunday , July 3 2022

China Outlines Plan to Stabilize Economy in Crucial Year for Xi

BEIJING — China’s premier, Li Keqiang, on Saturday announced a target for the country’s economy to expand “around 5.5 percent” this year, signaling the government’s emphasis on stabilizing growth in the face of global uncertainty from the pandemic and the war in Ukraine.

Premier Li laid out the goal in his annual policy speech at the opening in Beijing of a weeklong session of China’s Communist Party-controlled legislature. The target appeared aimed at maintaining political and economic stability as Xi Jinping, China’s leader, looks to secure another five-year term in power at a party meeting this fall.

The growth goal suggests that China values economic growth more than trying to rebalance output. Beijing has been trying, with limited success, to shift the economy away from its dependence on debt-fueled infrastructure investments and toward a more sustainable reliance on domestic consumption.

Western economists have predicted that the Chinese economy can grow 5 percent only by further increasing its already heavy borrowing and spending.

The stimulus plan comes amid growing signs of a deceleration in the Chinese economy. Continued lockdowns and travel restrictions to prevent the coronavirus epidemic from spreading have caused a downturn in spending at hotels and restaurants.

China’s huge construction industry is stalling as home buyers turn wary, with developers beginning to default on debts. Dwindling revenue from land sales have made some local governments more cautious about building additional roads and bridges.

The government said in January that growth last year was 8.1 percent. But by the last three months of last year, the economy was growing only 4 percent.

Keith Bradsher reported from Beijing, and Chris Buckley from Sydney. Li You, Liu Yi and Claire Fu contributed research.


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