In China, 100,000 civil servants are mobilized to stabilize the world’s second largest economy, very strongly affected by the health crisis, real estate crisis and the consequences of the war in Ukraine. The situation is worse than at the start of the pandemic, Prime Minister Li Keqiang acknowledged on Wednesday May 25 during a videoconference with officials from all Chinese provinces.
From our correspondent in Beijing,
Some on the networks compared it to the conference of 7,000 party cadres in 1962, which had gathered to criticize the “Great Leap Forward” policy. Without going so far as self-criticism as at the time, there was something unusual enough in Wednesday’s XXL meeting to wake up social networks which, something rare here too, were buzzing about the subject even before the official media do not provide the report.
not officially reported yet but by all unofficial accounts China is holding a nationwide meeting on the economy where central, provincial, municipal, and county govt officials are attending by video link, which is quite rare and underscores Beijing’s recognition & determination
— Zichen Wang (@ZichenWanghere) May 25, 2022
Falling property income
All administrative levels were in front of their screens: from the State Council – the Chinese government – to county, township and even village officials. No self-criticism, but a gloomy observation: according to Li Keqiang, the Chinese economy faces a critical risk following repeated confinements and other measures of the “Zero Covid” strategy, which wants to avoid too many deaths linked to viral pneumonia via drastic sanitary restrictions, but at the same time paralyze Chinese factories and megalopolises.
The growth target of 5.5% for this year could therefore not be achieved, acknowledges the Prime Minister. The priority for the second quarter is to put the Chinese economy back on the growth track. ” We will try to ensure that the economy can grow in the second quarter said Li Keqiang, according to a transcript that the FinancialTimes was able to check.
Tax revenue is affected, Li Keqiang again acknowledged, in remarks this time verified by the SCMP, some provinces have asked the central government to be able to borrow. Because property income has fallen by almost 30% in recent months, according to statements by the head of government quoted by the CMD. However, the sale of land remains one of the main sources of financing for local governments.
Recovery plan in 33 points
To the China Watchers who suspected a divergence at the head of the executive on health measures and economic stimulus measures, the state media responded by maintaining, in the aftermath of the conference, the hierarchy of appearance of matters between the Head of State and the Prime Minister. The latter, who returned to the front page of the People’s Daily recently, remains hidden behind the Chinese number one, who will seek a third term at the 20th party congress next fall.
In his role as chief economist, Li Keqiang therefore promised new tax cuts and new job aids, in a context where “ the difficulties are even greater than in 2020, when the epidemic hit the country hard “, according to remarks reported by the official media including the China Daily.
The administration is again invited to make an effort and the army of local officials must now deploy the necessary measures to implement the 33-point recovery plan presented by the central government earlier this week.