China's second quarter growth better, more policy steps ahead - premier

Monday 07 July 2014 07.21
Chinese economy still faces downward pressure, its Premier says
Chinese economy still faces downward pressure, its Premier says

China's economic growth quickened in the second quarter from the previous three months, but further modest government support measures will still be needed, Premier Li Keqiang said today.
              
Li was speaking at a news conference with German Chancellor Angela Merkel, who is visiting Beijing.

He said the Chinese economy still faces downward pressure and that the government will increase its usage of targeted measures to boost growth. 

His cautiously optimistic remarks may boost market confidence ahead of China's second-quarter economic report due on July 16.

Analysts polled by Reuters expects China's growth for the three months from April to June to have steadied at 7.4%.
              
"China's economic performance in the second quarter has improved from that in the first quarter. However, we cannot lower our guard against downward pressures," Li said. 

"We will keep up our composure and not adopt strong stimulus. Instead, we will increase the strength of targeted measures," the premier said.
              
To lift China's flagging economic growth, which hit an 18-month low of 7.4% in the first quarter of 2014, authorities have cut taxes, ordered regional governments to speed up spending and reduced the amount of cash that some banks have to hold as reserves.
              
Use of these so-called "targeted measures" are meant to help areas of the economy with real business needs, and is a departure from the past when China would cut rates or reserve requirements for all banks and ramp up spending across thecountry.