At Davos, Chinese Prime Minister unexpectedly reveals economic achievements

Chinese Premier Li Qiang assured investors and politicians gathered in Davos that the world's No. 2 economy has "huge potential" and remains an "important driver" of global growth, despite the "headwinds" it has seen over the past year.

China’s top government official said on January 16 that his country’s economy grew by “about 5.2 percent” last year, a surprise revelation that came a day before the official release of key economic data.

The 5.2% growth figure for 2023 is in line with a Reuters poll of analysts. Economists expect Beijing to again set an official growth target of 5% this year, a target they say will be tougher given China's overheated property market and deflationary pressures.

Speaking at the 54th annual meeting of the World Economic Forum (WEF) in Davos, Switzerland, Premier Li Qiang, China's second-highest official after President Xi Jinping, stressed that China has sought to expand its economy without using risky or short-term measures, such as large credit programs or spending sprees.

“We are not looking for short-term growth while accumulating long-term risks, but instead focusing on strengthening internal dynamics,” he said. “Just as a healthy person usually has a strong immune system, the Chinese economy can handle ups and downs in its performance. The overall long-term growth trend will not change.”

Mr. Li’s comments are consistent with public estimates of China’s economic growth last year. Official figures will be released in Beijing on January 17.

Caixin, a Chinese news agency, said a survey of economists last week concluded that the economy could grow 5.3% in 2023.

World - At Davos, Chinese Prime Minister unexpectedly revealed economic achievements — Chinese Premier Li Qiang and WEF Founder and Executive Chairman Klaus Schwab, in Davos, Switzerland, January 16, 2024. Photo: Xinhua

At Davos, Premier Li Qiang used much of his speech to present China as an attractive market for global companies and a country with strong economic growth prospects.

He pointed out that China, the world’s largest exporter, has the world’s most diverse industrial base. He touted China’s “super-large market,” its highly educated and skilled workforce, its global leadership in electric vehicles, and its huge and rapidly growing middle class.

In addition, the top Chinese official also called on the world to address what he described as a “trust deficit” between countries and, indirectly, criticized US policy toward China.

He called for creating a “non-discriminatory environment” for scientific and technological exchange, saying that “discrimination” in global industrial supply chains “harms development efficiency but also creates many economic risks and problems.”

Washington has taken a series of steps in recent years to protect advanced US technology from what it says is espionage and intellectual property theft. Those measures include placing restrictions on China’s access to US technology and limiting some research collaborations with China.

“We want to say to our Chinese friends that we do not want to decouple but we need to mitigate the risks to our supply chains in some way,” said Ursula von der Leyen, president of the European Commission (EC0), who spoke after Li.

China is preparing to impose export controls on three metals used in semiconductor production – germanium, gallium and graphite – and this is “not confidence-building”, Ms Von der Leyen said .

Minh Duc (According to NY Times, FT, Axios)

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