China’s top leaders pledged to expand domestic consumption and support the private sector without detailing any new stimulus measures, the latest in a series of rhetorical attempts to boost confidence in the economy as markets sink and growth disappoints.
The nation’s State Council promised to meet annual economic targets via “targeted and forceful” macroeconomic controls and strengthened policy coordination, China National Radio reported, citing a plenary meeting led by Premier Li Qiang on Wednesday.
Li called for more effort to boost domestic demand and consumption, including big ticket purchases, though no specific new measures were announced. He also promised to prevent “major risks” and deepen reforms in state-run sectors.
The meeting came as troubles mount for the Chinese economy, with recent data showing weak consumer spending growth, sliding investment and rising unemployment. Concerns about contagion risk from the worsening property slump are starting to spread to the financial sector, too, as a major trust firm with exposure to real estate missed payments on dozens of products.
Li’s pledge did little to stop the selloff in US-listed Chinese shares on Wednesday, with the Nasdaq Golden Dragon China Index falling 1.6% for its eighth decline in nine sessions. The gauge has dropped 13% this month.
The central bank on Tuesday cut a key interest rate by the largest amount since 2020, as authorities worked to shore up growth and speed the recovery. But officials have so far resisted rolling out major stimulus efforts in the world’s second-biggest economy, despite a pro-growth tilt signaled by the Communist Party’s Politburo at the end of July.
Stimulus in previous downturns — including during the global financial crisis and again around 2015 — sent housing prices and debt levels in the economy soaring. Officials don’t want a repeat of that result.
The State Council holds plenary meetings no more than twice a year, according to recent records. Most have been to discuss the government’s annual work report ahead of a major legislative meeting in March. The rest have covered other themes, such as economic reform or the naming of top officials in the special administrative regions of Hong Kong and Macau.
--With assistance from Li Liu.
(Adds context throughout.)
