China’s economy on course to grow in Q2

Chinese Premier Li Qiang reaffirmed on Tuesday that China is on track to achieve its annual growth target of approximately 5%. He stated that growth in the second quarter is expected to be faster than in the first. Although China’s economy expanded by 4.5% in the first quarter, surpassing expectations, subsequent data have indicated a slowdown, with economic indicators for May falling short of analysts’ projections.

During the World Economic Forum’s Annual Meeting of the New Champions, held in Tianjin, China, Li expressed optimism about China’s economic rebound and improvement. The conference, taking place in person for the first time since the pandemic, will run from Tuesday to Thursday. Li, who assumed the role of premier in March, emphasised China’s economic recovery and mentioned the upgrade of growth forecasts by international organisations, without specifying the institutions or dates.

Forecasts by economists for China’s gross domestic product (GDP) this year have fluctuated. While several investment banks, including Goldman Sachs, JPMorgan, UBS, and Bank of America, recently revised down their full-year GDP forecasts, earlier this year, many firms had raised their expectations for 2023 growth. The World Bank raised its forecast for China’s growth to 5.6% from 4.3%, and the International Monetary Fund increased its GDP projection to 5.2% from 4.4%.

Li also stressed the importance of global cooperation in trade and economic growth. He dismissed the concepts of reducing dependencies and de-risking as false propositions, emphasising the interconnectedness and interdependence of countries’ economies due to economic globalisation. Li highlighted the significance of security and peace, describing security as the number one priority and emphasising its role in ensuring the value of subsequent endeavours. Beijing has prioritised national security, while the United States has taken actions such as restricting China’s access to high-end semiconductors.

Earlier this year, Liu He, a former vice premier, also emphasised China’s commitment to high-quality economic development and attracting foreign investment during his speech at the World Economic Forum’s annual event in Davos, Switzerland.