China’s cabinet met on Friday to discuss measures to spur growth in the economy, state media reported, pledging to roll out policy steps in a timely way amid signs that a post-COVID recovery is fading.
“We must take more effective measures to enhance the momentum of development, optimize the economic structure and promote the sustained recovery of the economy,” state media said, citing a regular cabinet meeting chaired by Premier Li Qiang.
Officials at the meeting pledged to roll out policies in a timely manner when the conditions are right and to take more forceful measures in response to changes in the economic situation, the report said.
While economic growth beat expectations in the first quarter, analysts are now downgrading their forecasts for the rest of the year, as factory output slows amid weak external and domestic demand.
“A slowdown in global trade and investment has had a direct impact on China’s economic recovery,” the report added.
Several major banks have cut their 2023 gross domestic product (GDP) growth forecasts for China after May industrial output and retail sales data missed forecasts and indicated that Beijing will need to do more to shore up a shaky post-pandemic recovery.
The government has set a modest GDP growth target of about 5 per cent for this year after badly missing its 2022 goal.
The meeting also passed plans to step up financing support for technology companies and draft rules for supervising private funds.
Sources involved in policy discussions told Reuters that China will roll out more stimulus measures to support the economy, but concerns over debt and capital flight will keep measures aimed at shoring up weak demand in the consumer and private sectors.
On Friday, policymakers agreed to introduce measures to expedite the introduction of specific policies to promote the development of venture capital funds, provide more support to technology startups and to introduce measures against illegal financing, state media said.