China, which has experienced rapid development in recent decades, will find it difficult to “maintain” high growth, its Prime Minister warned on Friday, in a context where “uncertainties are increasing”.
The Asian giant is already preparing for a slowdown in its growth: it has set a target this year of “about 5.5%”.
This rate would be, excluding the COVID period, the weakest for China since the beginning of the 1990s.
China had set “at least 6%” growth last year, but the country had easily reached its target thanks to a catch-up effect linked to Covid (+8.1% over one year).
“At the global level, maintaining medium to high growth for an economy of this size (like China) is a major challenge,” Chinese Premier Li Keqiang told reporters.
With the global pandemic, an epidemic rebound in China and the war in Ukraine, “the economy is facing new downward pressure”, warned Chinese Premier Li Keqiang.
Mr. Li did not explicitly mention these factors but referred to “various changing complex environments and increasing uncertainties”.
On the epidemic front, China continues to follow a zero COVID policy, contrary to many countries that opt for cohabitation with the virus and lift restrictions.
While China’s strategy allowed the country to recover quickly from the first epidemic shock, zero COVID comes with a high social and economic cost.
As soon as a case appears, the authorities generally impose strict containment measures on a large scale and carry out massive and repeated screening of the population.
This approach, however, raises questions about the viability of such a strategy.
China reported 1,369 new COVID cases on Friday. This figure, which also includes asymptomatic cases, is at its highest in two years.
Questioned by the press on the sidelines of the parliamentary session, the Prime Minister did not answer on the impact that the war in Ukraine could have on the Chinese economy.
China is the first trading partner of Ukraine, considered the breadbasket of Europe.
The country notably supplies the Asian giant with nearly a third of its corn imports.