Less drastic reforms to foster growth through stimulus measures. The annual session of the Chinese Parliament in joint session closes with the traditional press conference of Premier Li Keqiang, the last one, given that he is at the end of his mandate. The premier declared the goal of reaching + 5.5% of GDP in 2022 “difficult”. A targeted fiscal policy and stimulus measures will be needed, especially by restarting infrastructure projects.
The investment crux
In 2021, investments in infrastructure were zero. This year, however, they should increase by about 5% even if the planning will have to deal with the increase in prices due to the sanctions on Russia for the invasion of Ukraine.
Chinese growth faces the double shock associated with peak oil and the spread of the coronavirus. Goldman Sachs economists say China will miss its GDP target by as much as 1 percentage point. “There must be support for macro policies”.
Li Keqiang made the mea culpa. One of the main reasons for last year’s economic slowdown – he admitted – was Beijing’s attempts to implement difficult structural reforms, considered crucial for long-term growth.
As is well known, in addition to ownership limits, the drive for “common prosperity” has led to strict regulation of the Internet and educational societies, while stricter pollution controls have affected industrial production.