China can maintain high growth and transition to consumer-led economy, premier Li says
TIANJIN: China's Premier Li Qiang said on Wednesday he was confident the world's No.2 economy could maintain a "relatively rapid" growth rate as it transitions from a manufacturing-led model to a consumer-driven one, a shift analysts say is key to securing its future.
Li's keynote speech, delivered at a World Economic Forum meeting in Tianjin, comes as Chinese officials seek to cushion the economic damage caused by the trade war with the United States through policy support - a particularly daunting challenge for authorities grappling with the pressing need to undertake painful structural reforms.
Most analysts believe China's US$19 trillion economy faces two broad paths: it can sustain relatively high, albeit slowing, growth driven by strong exports - a trend likely to fade as trade tensions with the West escalate - or it can endure several years of slower growth while implementing reforms aimed at unlocking longer-term gains through its vast consumer market.
But China's second-ranking official told delegates he was optimistic that Beijing could pull off both.
"We are confident in our ability to maintain a relatively rapid growth rate for China's economy," Li said.
"China's economy showed steady improvement in the second quarter," he added. "Regardless of how the international environment evolves, China's economy has consistently maintained a strong momentum for growth."
Beijing has set an ambitious 2025 growth target of "around 5 per cent", although most analysts expect China will struggle to keep expanding at those rates in the coming years if a lasting truce cannot be secured with Washington.
Oxford Economics expects average annual GDP growth this decade to halve from the 1999-2019 average to 4.5 per cent and slow to 3 per cent in the decade after.
Economists say more policy support for households could ease the transition to consumption-led growth, but the shift remains politically sensitive for the ruling Communist Party, which has long tied its legitimacy to high growth - a key reason why policymakers have delayed seriously pursuing it for over a decade.
Household consumption has remained at around 39 per cent of GDP over the past two decades, according to analysts at Rhodium Group, a China-focused US think tank, far below averages in OECD economies of 54 per cent.
On Tuesday, China released guidelines aimed at using financial tools to boost consumption, including pledges to support employment and raise household incomes.
The International Monetary Fund last year said deeper reforms are needed to convert China's economy to one led by consumption, including pension reforms, and erecting a social safety net to reduce the need for massive precautionary savings.
"We aim to help China transition from a major manufacturing power to a colossal consumer market," Li said. "This will open up vast and untapped markets for businesses from many countries."
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
36 minutes ago
- The Star
Japan conducts first domestic surface-to-ship missile test
The Japan Ground Self-Defence Force fired a single Type-88 missile towards Pacific coastal waters from a training ground in the northern island of Hokkaido on June 24. - AFP TOKYO: Japan on Wednesday (June 25) called its first surface-to-ship missile test within its territory necessary training given the current "severe security environment", as it boosts military capacity to counter China. The Japan Ground Self-Defense Force (JGSDF) fired a single "Type-88" missile towards Pacific coastal waters from a training ground in the northern island of Hokkaido on Tuesday. The Japanese military usually conducts its surface-to-ship missile drills at bases in the United States, but those training sessions are costly with the number of personnel who can participate often limited. "Domestic live-fire exercises like this one provide training opportunities for more troops," top government spokesman Yoshimasa Hayashi told a regular press conference Wednesday. Such drills are "extremely important for us to maintain and improve the capability to defend islands and other areas, given the current severe security environment", he said. He stressed that the exercise was not aimed at any specific nation, but Japan has previously called neighbouring China its greatest security challenge as Beijing builds up military capacity in the region. The relative weakness of the Japanese yen has also inflated the cost of using American facilities for training, Japanese media reports said. Japan is in a multi-year process of increasing its defence spending to the Nato standard of roughly two per cent of gross domestic product (GDP). It is also bolstering its military alliance with Washington, moving to make US and Japanese forces more nimble in response to threats such as a Chinese invasion of Taiwan. - AFP
The Sun
an hour ago
- The Sun
Steven Sim slams PAS leader's racist remark over Army Chief's appointment
PETALING JAYA: Human Resources Minister Steven Sim Chee Keong has strongly condemned remarks made by a PAS leader who questioned the recent appointment of Lieutenant General Datuk Johny Lim Eng Seng, allegedly on racial grounds. In a Facebook post, Sim expressed outrage over Zaharuddin Muhammad, the PAS Sungai Buloh chief, who reportedly criticised the appointment of the new Lieutenant General simply because he is of Chinese descent. ALSO READ: DAP leaders criticise PAS for politicising Christmas celebration 'However, I am deeply angry that a PAS leader appears to have criticised his appointment just because he is Chinese. 'It's heartbreaking — not only was Lieutenant General Lim insulted, but that PAS leader also insulted the thousands of Malaysians who wear the uniform every day, who are willing to be apart from their families, who endure heat, rain, jungle, and border duty — all for the sake of this nation,' he wrote. Lim, a veteran with 41 years of service in the Malaysian Armed Forces (ATM), was recently promoted to one of the highest military ranks in the country. Sim congratulated him and emphasised the significance of recognising sacrifice over racial identity. 'At the border, bullets don't recognise race. When enemy bullets come, they don't ask whether our soldiers are Malay, Chinese, Indian, Kadazan, Iban or Orang Asli. 'But when an appointment like this is announced, suddenly some choose to see race over sacrifice,' he stated. Sim also accused Zaharuddin of undermining not only Johny Lim's contributions, but also the trust placed in him by the ATM and the Yang di-Pertuan Agong, who serves as Supreme Commander of the Armed Forces. 'Statements like this expose PAS's real attitude toward non-Muslims in Malaysia,' he wrote. 'Is 41 years of service still not 'worthy' enough? Must a soldier's love for his country be judged by the colour of his skin?' He further pointed to the legacy of other non-Malay military leaders, such as Rear Admiral (Rtd) Tan Sri K. Thanabalasingam, the first local Chief of Navy, and Brigadier General Dato' Sri Goh Seng Toh, as examples of patriotic Malaysians who have served with distinction. Calling the statement 'racist, seditious and treasonous,' Sim urged firm legal action to be taken as a warning against politicians who stoked racial sentiments. 'Such vile remarks should be met with the full force of the law. Politicians, no matter the party, must never play with the fire of racism,' he added. The Melaka-born officer recently received his third star yesterday, in a ceremony officiated by Armed Forces chief General Tan Sri Mohd Nizam Jaffar and witnessed by the armed forces' service chiefs. Lim received his early education at St Francis Primary School in Melaka from 1973 to 1978, and continued at St Francis Secondary School until 1983. He later joined the 25th Regular Commissioning Course (TJT 25), trained at the Royal Military Academy Sandhurst, and was commissioned into the Royal Ranger Regiment.
Malay Mail
an hour ago
- Malay Mail
At WEF in Tianjin, Singapore PM Wong calls for ‘flexible multilateralism' amid weakening global rules, US tariffs, and rising tensions
TIANJIN, June 25 — Countries should respond to weakening global rules by fostering integration, dismantling trade barriers, and reinforcing multilateralism, Singapore Prime Minister Lawrence Wong said today. Speaking at the World Economic Forum's Annual Meeting of the New Champions in Tianjin, Wong emphasised that while reforming global trade rules and improving multilateral systems is challenging, 'there is no alternative' to sustained international cooperation, according to a report in The Straits Times. He proposed 'flexible multilateralism', where like-minded countries could initiate collaboration, allowing others to join when ready, during a dialogue with WEF president Borge Brende. Wong noted that post-Cold War globalisation had spurred integration, but recent years have seen rising discontent, amplified by the Covid-19 pandemic and global security concerns. He warned that global institutions and norms are weakening, with economic nationalism increasingly replacing cooperative international engagement. 'Unfortunately, the world is changing,' he said. 'We see over the years, more pressures, discontent against globalisation has risen.' This trend poses particular risks to small countries like Singapore, which have limited leverage and could be sidelined in global decision-making, he said. However, even larger nations would struggle to address common challenges such as pandemics, climate change, and financial instability in the absence of multilateral cooperation, he added. Wong cited the World Trade Organisation as an example of a system in need of reform, especially in light of developments like digital trade, but stressed the solution lies in updating—not abandoning — global rules. He highlighted Singapore's role in co-convening the Joint Statement Initiative on E-Commerce with Australia and Japan, which led to more than 70 countries agreeing on new digital trade rules after five years of negotiations. Commenting on the 10 per cent US tariffs imposed on Singapore, Wong said the trade balance favours the US and that a zero tariff should apply under the free-trade agreement, but acknowledged that 10 per cent is likely America's baseline. Wong added that Singapore is engaging US officials and hopes the tariffs on Southeast Asian countries will be adjusted closer to this level. On managing ties with both the US and China, he said Singapore maintains 'broad and substantial' relationships with both and focuses on advancing its own national interests. 'It's not about balancing between the two superpowers,' he said. 'It's about being consistent and principled in promoting Singapore's interests.'
