China's Premier Li Qiang called for stabilising external demand and expanding trade cooperation as weak domestic demand and rising external risks weigh on growth. The call came the same day data showed industrial output and retail sales slowing further in July, after second-quarter GDP growth cooled to a three-and-a-half-year low.
Premier Li Qiang told a State Council meeting on Monday that China must stabilise external demand and expand international trade cooperation, as weak domestic demand and rising external risks weigh on the world's second-largest economy. According to state media Xinhua, Li said: "the problem of insufficient domestic demand remains prominent".
Growth cools as domestic demand lags
China has leaned on exports to power growth and offset soft domestic demand, since a prolonged property crisis constrains investment and household spending. That reliance leaves the economy exposed, as frictions with trading partners and the Middle East war could hit global demand for Chinese goods.
Economic data released Monday showed momentum stayed 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. Second-quarter GDP growth landed at 4.3%, below Beijing's 4.5% to 5.0% full-year target.
Exports, meanwhile, have served as a key growth engine, as a global AI infrastructure buildout fuelled demand for China-made high-tech products and lifted prices of chips and other AI-related goods. Li did not elaborate on how the government will stabilise external demand, but he vowed to strive to achieve the annual economic development goals.
Policy pledges target investment and jobs
Li reiterated pledges to use existing policies and introduce practical, effective new policies in a timely manner, and he 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.
Source: Investing.com
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