China Q2 economic growth likely to be close to 6.7%: Premier Li Keqiang
BEIJING—Premier Li Keqiang said the Chinese economy is “basically stable” and on course to meet its major targets this year, with its second-quarter growth rate likely to be close to the first quarter’s 6.7% level when results are announced Friday.
Economists, citing weakness in the manufacturing and financial services sectors, have forecast that growth will come in slightly below its January-March level, which was already the slowest pace since the global financial crisis.
Addressing business executives and government representatives at a meeting Wednesday on the sidelines of a European Union-China summit, Mr. Li also defended China against charges it is selling steel and other commodities below their cost on global markets.
A major focus of the two-day summit has been European concerns that excess capacity in many Chinese industries is washing onto global markets, particularly the politically sensitive steel industry, eroding jobs and hurting European corporate profitability.
European Commissioner for Trade Cecilia Malmström said China’s overcapacity “needlessly pits” Chinese and EU steelworkers against each other. She added that China should eliminate state subsidies in the marketplace, reduce overcapacity and ensure that public resources aren’t used to export overcapacity.
Mr. Li said China plans to cut between 100 million and 150 million tons of overcapacity over the next few years, including 45 million tons from the steel industry this year, and said China is “determined to address the problem.” But excess industrial capacity is a global concern and “not triggered by one country,” he said, adding that China doesn’t engage in dumping or subsidies to strengthen its competitive position.
The plan outlined by Beijing amounts to an approximately 10% reduction in capacity. Industry analysts say current excess capacity in steel and other industries is around 30% and the government moves may not be enough to bring supply in line with demand in the near future.
