Beijing – Chinese Premier Li Keqiang acknowledged that all was not well in the Chinese economy saying, ‘It is true that China’s economy has encountered new, downward pressure. The decline in the world’s second-largest economy is due to the pressures in the global economy. China will take tough measures to correct it.’ Only 24 hours ago, the mainstay of the Chinese economy, the manufacturing output reported a 17-year record low. Given the happenings, Keqiang’s confession becomes significant.
For the last few months, the Chinese economy is consistently slowing down. At the end of the last year, it reached its lowest of the previous three decades. Following that, the main factors of the Chinese economy such as the import-export, trade profits, domestic demand, stock market, real estate investment, have consistently reported a drop.
Despite it, the Chinese government was not willing to concede that the Chinese economy was in trouble. Instead, the Chinese regime claimed that it was the effect of the amendments being made to strengthen the economy. Whereas, the international financial institutions were indicating China’s economic slowdown and consistently warning of the risks it posed. However, China always supported its economy being healthy, ignoring the warnings.
On Friday, Premier Keqiang’s statements indicated for the first time that China was preparing to brace decline in the economy. China’s acceptance of the pressures on its economy and of its fall is a decisive moment for the global economy. Till date, no Chinese leader accepted the responsibility for the negativities in the economy.
Some analysts believe that the ongoing US-China trade war and talks between them seem to be a significant factor behind the Chinese confession. Although the US President has expressed positivity regarding the trade negotiations with China, he has repeatedly suggested that there was no urgency to act. China is, therefore, nervous and is consistently indicating that it is willing for a compromise for successful negotiations. Thus, the confession of a decline in the economy cannot be denied as being part of the same strategy.
A few days ago, Prime Minister Keqiang stated in the National People’s Congress that the economy was likely to face significant threats and challenges soon, as also that the situation was very complicated. At the same time, Keqiang also indicated that the Chinese economy would be able to attain a 6% GDP growth in the year 2019. Nevertheless, he had not openly confessed to the decline in the economy, at that time.
Meanwhile, some economists have also cautioned of adverse reactions emerging from the global economy in response to the Chinese Premier’s confession.