From Bloomberg
(Bloomberg) — China will intervene with targeted measures to support growth if the economy slows to a rate that hurts jobs and people’s income, Premier Li Keqiang said.
Hitting a growth target of about 7 percent for this year won’t be easy, and China has ample policy tools it can use should expansion approach the lower limit, Li said at a briefing in Beijing.
“We still have a host of policy instruments at our disposal,” Li said. He said the government was “prepared to step up our targeted macroeconomic regulations” if needed.
Policy makers must strike a balance between maintaining growth and pushing ahead with structural adjustments, Li said likening the challenge to the Chinese boardgame of weiqi. Efforts to divest itself of some power and streamline administrative approvals have helped address growth pressures, he said.
“This is not nail clipping,” Li said. “This is like taking a knife to one’s own flesh.”
Nonetheless, Li said China has the capacity to forestall any systemic or regional financial risks. He said Chinese banks have high capital-adequacy ratios and the level of nonperforming loans is low compared to other nations.
