China’s top economic official made a high-profile bid to bolster confidence in the country’s economy, stock markets and reform programme as Beijing reported its slowest quarterly growth figure in almost a decade. Vice-premier Liu He on Friday said the world’s second-largest economy faced economic challenges and admonished bankers who he said were sometimes reluctant to support private-sector companies, but insisted China would maintain stable growth.
“If you analyse China’s economy by focusing only on one thing or one period, you might feel it faces difficulty,” Mr Liu told the country’s main media organs: China Central Television, the People’s Daily newspaper and the Xinhua news agency. “But if you look at it from a larger historical perspective, the outlook is very bright.” Mr Liu’s comments came as the country reported the economy expanded just 6.5 per cent year-on-year in the third quarter, marking China’s weakest quarterly growth rate since the depths of the 2008-09 global financial crisis. The lower than expected figure has increased the pressures building on President Xi Jinping as his government contends with the fallout from the continuing trade war with the US. In the rare public remarks, the vice premier argued fears about the trade war were exaggerated.
“The psychological impact is greater than the actual impact,” Mr Liu said. “China and the US are currently in contact,” he added, referring to discussions about a possible meeting between Mr Xi and President Donald Trump at next month’s G20 meeting in Buenos Aires. The Chinese government remains on track to exceed its full-year growth target of 6.5 per cent. The gross domestic product expansion, reported by the National Bureau of Statistics, was slightly lower than projections by many economists and analysts. “China’s slower but still strong headline growth masks rising domestic and external vulnerabilities that are likely to presage a further growth slowdown in the absence of concerted policy measures,” said Eswar Prasad, professor of trade policy at Cornell University in the US.