World

China’s economy is stable and healthy: Xi

Chinese President talks up country's growth potential as he goes on Russia visit

SHANGHAI : Chinese President Xi Jinping said the country's economy is stable, healthy and well placed to meet all risks and challenges, according to a transcript published by the Xinhua news agency.

Mr Xi made the remarks to the Tass Russian News Agency and Rossiyskaya Gazeta newspaper on Tuesday.

He is now on a state visit to Russia where he will attend a major investor forum in St Petersburg.

Mr Xi did not mention China's trade war with the US, which escalated last month after the two nations slapped new tariffs on each other.

"Looking into the future, China's economy bears the supporting conditions for stable, healthy and sustainable growth," he said.

Mr Xi noted that China had ample room to manoeuvre in the macroeconomic policy space and that the country's economy got off to a good start in 2019 as key indicators were kept in a reasonable range.

China's economy grew at a steady 6.4 per cent pace in the first quarter, defying expectations for a further slowdown, as industrial production jumped sharply and consumer demand showed signs of improvement.

However, it reported surprisingly weaker growth in retail sales and industrial output for April, putting pressure on Beijing to roll out more stimulus.

In a related development, the International Monetary Fund (IMF) cut its 2019 economic growth forecast for China to 6.2 per cent yesterday on heightened uncertainty around trade frictions, saying more policy easing would be warranted if the trade war escalates.

The downgrade came just two months after the IMF raised its China forecast to 6.3 per cent from 6.2 per cent partly on then-brightening prospects for a trade deal with the US.

It also cut the growth forecast for 2020 to 6 per cent from 6.1 per cent.

The escalation in the trade dispute underlined the risks for the world's second biggest economy from higher US tariffs.

Washington has levied higher tariffs on a total of US$250 billion (S$340 billion) of Chinese imports since mid-2018, accusing China of forced technology transfers and intellectual property theft.

China, which denies the accusations, has retaliated with tariffs on about US$110 billion of US goods.

"Growth is expected to moderate to 6.2 per cent and 6.0 per cent in 2019 and 2020, respectively," IMF deputy managing director David Lipton said in a statement.

"The near-term outlook remains particularly uncertain given the potential for further escalation of trade tensions."

US President Donald Trump has threatened to slap tariffs of up to 25 per cent on an additional list of Chinese imports worth about US$300 billion.

The trade war has already upended global supply chains and hurt world growth.

Economists have said the tariffs will curb growth in the US and China, and financial markets worry a protracted dispute could tip the world economy into a recession. - REUTERS

WORLD