A top Chinese official has reassured his European counterparts that his country will be able to achieve its economic growth targets this year, adding deeper bilateral trade and investment ties could benefit both the EU and China.
Kristian Rouz – Chinese Premier Li Keqiang says the world’s second-largest economy is set to meet its annual economic growth target of 6.5 percent this year. Li stressed the ongoing opening of the Chinese economy to international investment, and its solid commitment to free trade will support expansion in the private sector, while the rising prominence of domestic sources of growth could make up for the losses in foreign trade.
Speaking at an economic forum in Dubrovnik, Croatia, Friday, Li said China’s business activity and broader economic output remain on track to meeting the central government’s projections for this year. This, he said, is despite the rising concern of trade tensions with the US and a cooling demand for Chinese-made goods in the EU and other regions.
Previously, Li suggested China would address its trading partners’ concerns related to intellectual property rights and tariffs.
“Chinese enterprises operating abroad ought to respect international rules as well as the laws and regulations of the respective countries”, Li said.
However, in his Dubrovnik speech, the Chinese premier stressed – the government in Beijing, as well as the People’s Bank of China (PBOC) will keep the existing approach to economic policies and regulation intact.
READ MORE: Paris, Berlin Jumping on New Silk Road Bandwagon Just a Matter of Time – Analyst
He also said China would not implement monetary stimulus in the form of cutting interest rates or money bill emission to support GDP expansion. This comes despite PBOC officials having implemented several rounds of “quiet stimulus” by cutting reserve ratio requirements (RRRs) for commercial banks – which is a milder form of cutting interest rates.
Speaking at the EU summit in Brussels several days prior, Li said China would deepen economic reforms aimed at attracting foreign investment and expanding its trade ties with the bloc.
“Not only will this be conducive to China’s reform and opening up, but also Europe’s unity and prosperity”, Li said “When we say it, we have got to do it. When we do it, there will be achievements”.
Li’s tour of Europe comes amid ongoing trade negotiations with the US – which have lasted for months, and have yet to produce any tangible results. China is facing steep 25-percent US tariffs on hundreds of billions worth of its goods if the talks fall apart or falter for too long.
In light of this, China is seeking deeper trade ties with the EU – one of the world’s largest markets for consumer goods on par with the US. Last month, Italy announced it would join the China-led “Belt and Road” trade and investment scheme – and while some EU officials have expressed doubts over deeper economic cooperation with Beijing, others say it could be a mutually-beneficial affair.
“We managed to agree on a joint statement which sets the direction for our partnership based on reciprocity”, European Council President Donald Tusk said after talks with Li.
Chinese officials have denied the alleged abuses of foreign companies’ intellectual property, and said Beijing has never implemented policies that put international enterprises at a disadvantage on China’s domestic market.
However, some EU officials disagree, saying until recently China has demanded that foreign companies partner with Chinese firms to operate on China’s internal market. The EU has also accused China of making verbal reassurances for years, without actually delivering on its promises of greater openness and reforms.
Although Li expressed confidence the EU and China could deepen bilateral cooperation, the slowing growth and consumer demand across the bloc, as well as China’s economic woes could derail such plans.
READ MORE: China Provides $2 Billion Loan to Pakistan’s Ailing Economy — Report
According to Reuters, China’s economy could slow to 6.2 percent annual growth this year, while the Eurozone could see a growth of just 1.3 percent for the whole of 2019. It remains unclear if increased European investment in China, and a greater influx of Chinese goods into the EU could reverse this slowdown in the near-to-medium term.