BEIJING, Aug 17 (Reuters) – China’s Premier Li Qiang on Monday called for efforts to stabilise external demand and expand international trade cooperation, as weak domestic demand weighs on growth and external risks loom.
“Currently, the problem of insufficient domestic demand remains prominent, some industries and enterprises are facing increasing difficulties, and uncertainties in external environment are rising,” Li said at a meeting of the state council, China’s cabinet, according to state media Xinhua.
The world’s second-largest economy has been relying on exports to power growth and offset weakness in domestic demand, as a prolonged property crisis constrains investment and household spending. Yet the reliance leaves it vulnerable as frictions with trading partners and the Middle East war could hit global demand for Chinese goods.
Economic data released on Monday showed that momentum remained subdued in July, with industrial output and retail sales slowing, after growth cooled to a three-and-a-half-year low in the April-to-June period. At 4.3%, the second-quarter gross domestic product growth landed below Beijing’s 4.5% to 5.0% full-year target.
The country’s booming goods exports, meanwhile, served as a key growth engine as a global AI infrastructure buildout fuelled demand for China-made high tech products and lifted the prices of chips and other AI-related goods.
In the meeting, Li vowed to strive to achieve the annual economic development goals.
“We should actively stabilise external demand, expand mutually beneficial international economic and trade cooperation and promote balanced trade development,” Li was quoted as saying. He did not elaborate on how the government will stabilise external demand.
Li reiterated pledges to make use of existing policies and introduce practical and effective new policies in a timely manner, and highlighted expanding domestic demand as a strategic focus.
He also called for promoting employment and income growth, supporting investment in emerging sectors and innovating financing mechanisms to attract private investment in infrastructure.
(Reporting by Yukun Zhang, Ethan Wang and Ryan Woo; Editing by Toby Chopra)
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