Chinese Premier Li Keqiang: ‘recession will be followed by a new boom’

Business & Technology

China is experiencing its worst economic slowdown in decades with tens of millions of people unemployed and a demand slump around the world dampening chances for a quick recovery. Premier Li Keqiang nonetheless sounded an upbeat message on the sidelines of the National People's Congress.

People cycle past a screen showing a news conference by Chinese Premier Li Keqiang after the closing session of the National People's Congress (NPC), in Beijing, China May 28, 2020.
/ Credit: REUTERS/Thomas Peter

Chinese Premier Li Keqiang spoke to reporters on the sidelines of the National People’s Congress on Thursday.

“A recession will be followed by a new boom,” Li said of China’s economy.

China is experiencing its worst economic slowdown in decades with tens of millions of people unemployed. Li said abandoning an annual GDP target would allow China’s government to focus on economic development and ease poverty.

“We believe development still holds the key and is the foundation for resolving all of the problems in China today,” Li said. He affirmed that China remains committed to its stated goal of eliminating poverty by the end of this year, in part through expanding unemployment benefits and creating more jobs for migrant workers.

There will be economic stimulus, Li said, but it will be restrained. “Sufficient liquidity is important to economic development, but excessive liquidity will induce froth in the marketplace,” he explained. Li did pledge support for China’s export sector and relief for its SMEs, which he said was in line with China’s plans for market-oriented reform.

Li also vowed international cooperation for finding the source of COVID-19 and to combat the virus. China’s Foreign Minister Wang Yi previously said it “will work with the international scientific community to look into the source of the virus,” but an investigation must be “free of political interference” and “respect the sovereignty of all countries.” China’s government has also proposed that an assessment of the global response to COVID-19 wait until the pandemic is over, though it could be years before the virus is brought under control.

On Hong Kong, Li’s remarks were brief. He affirmed that China upholds the “one country, two systems” principle, and said its resolution for a national security law for Hong Kong ensures the territory’s “long-term prosperity and stability.” Protesters have already taken to the streets to protest the legislation, which gives China the power to suppress acts threatening national security and could weaken the city’s status as a global financial hub.

Li also said China does not want a cold war with the United States, and is not in favor of decoupling. He cited U.S. company Honeywell’s recent investment in Wuhan as an example of ongoing cooperation. “Decoupling between the two economies will do neither side any good and will also be harmful to the world,” Li stated.

On Taiwan, Li said China’s policy is “reunification.” In his government work report, Li omitted the word peaceful when referring to Taiwan, but in his remarks to reporters, Li used the term peaceful reunification.