Economy

Li Qiang: New premier tries to boost confidence in Chinese economy

Published

2 years ago

March 13, 2023

Harry Miller

Chinese Premier Li Qiang speaks in his first Q&A session after he took up his new role

By Grace Tsoi

BBC News, Singapore

China’s new Premier Li Qiang has sought to restore confidence in the country’s economy in his first public address since taking up the role.

He said that a growth target set last week – 5% – would “not be easy” to meet, but added that the “economy is stabilising and picking up again”.

The world’s second-largest economy is still reeling from the effects of Beijing’s zero-Covid policy.

Challenges also loom because of a declining population and job losses.

Investors’ confidence too has taken a hit in recent years as China’s leader Xi Jinping consolidated his power, cracking down on private businesses, from tech companies to the tutoring industry.

In an attempt to allay those concerns, Mr Li said: “During a period last year, there was some incorrect opinion on the development of the private economy which worried some entrepreneurs… The environment for the private economy would get better and better and there would be more space for it.”

Mr Li also struck a more conciliatory tone towards the US: “China and the United States should co-operate, and must co-operate. When China and the US work together, there is much we can achieve. Encirclement and suppression are not advantageous for anyone.”

As party chief of Shanghai, he oversaw one of the harshest zero-Covid lockdowns that battered China’s economic hub, leaving many without food. Party officials often went above and beyond to implement what was seen as Mr Xi’s signature policy, which was reversed in December following widespread protests.

Although Mr Li’s appointment was near certain after the Party Congress in October, he was formally appointed to the role only during the Two Sessions, the annual meetings of China’s legislature and top political advisory body that ended on Monday.

As premier, he is now tasked with managing China’s economy and his elevation has surprised many – unlike almost all his predecessors, he has had no experience working in the central government. But he is known as a loyalist of Mr Xi’s, who worked closely with him in Zhejiang – one of China’s richest provinces – between 2002 and 2007.

“Running the State Council machinery will require some adjustments, but he likely had some ‘practice’ during zero-Covid since Shanghai, as the largest city in China, had to co-ordinate closely with State Council agencies and he even took over the Covid leading group for months now,” said Victor Shih, a professor at University of California San Diego.

“On issues that Xi cares about, there will be very little room for flexibility. However he [Li] may have greater ability to persuade Xi.”

The Economist Intelligence Unit’s principal economist Yue Su noted Mr Li did not use the opportunity to propose new economic measures.

“This means Li Qiang has limited ownership in policy decisions at least during his first year in the office and the Politburo meeting will still be the key to assessing China’s policy direction.”

She added that investors’ confidence would not come back immediately due to a lack of “institutional measures” – even if Mr Li looks like a “pro-business premier” who has a good track record in Zhejiang and Shanghai.

Mr Xi, the most powerful leader since Chairman Mao Zedong, also secured a historic third presidential term during the Two Sessions last week. This too was widely expected after the two-term limit on presidential term was removed five years ago.

“This is my third term holding such a high office as the country’s president. The trust of the people is the greatest motivation for me to move forward and a heavy responsibility on my shoulders,” Mr Xi said on Monday.

“Security is the bedrock of development, while stability is a prerequisite for prosperity.

“We must fully promote the modernisation of national defence and the armed forces, and build the people’s armed forces into a Great Wall of Steel that effectively safeguards national sovereignty, security and development interests.”

Additional reporting by BBC Chinese’s Yan Chen

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Economy

S&P/TSX composite up more than 100 points, U.S. stock markets also climb higher

Published

7 hours ago

October 4, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, boosted by strength in the base metal and technology stocks, while U.S. stock markets also pushed higher.

The S&P/TSX composite index was up 136.18 points at 24,104.68.

In New York, the Dow Jones industrial average was up 17.13 points at 42,028.72. The S&P 500 index was up 13.95 points at 5,713.89, while the Nasdaq composite was up 96.50 points at 18,014.98.

The Canadian dollar traded for 73.65 cents US compared with 73.86 cents US on Thursday.

The November crude oil contract was up 78 cents at US$74.49 per barrel and the November natural gas contract was down nine cents at US$2.88 per mmBTU.

The December gold contract was up US$7.30 at US$2,686.50 an ounce and the December copper contract was up a penny at US$4.56 a pound.

This report by The Canadian Press was first published Oct. 4, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

S&P/TSX composite down nearly 100 points, U.S. stock markets also lower

Published

1 day ago

October 3, 2024

Anne Joseph

TORONTO – Canada’s main stock index was down nearly 100 points in late-morning trading, weighed down by losses in base metal stocks, while U.S. stock markets also fell.

The S&P/TSX composite index was down 97.97 points at 23,903.58.

In New York, the Dow Jones industrial average was down 196.05 points at 42,000.47. The S&P 500 index was down 14.66 points at 5,694.88, while the Nasdaq composite was down 24.06 points at 17,901.06.

The Canadian dollar traded for 73.88 cents US compared with 74.12 cents US on Wednesday.

The November crude oil contract was up US$2.87 at US$72.97 per barrel and the November natural gas contract was up seven cents at US$2.96 per mmBTU.

The December gold contract was up US$2.40 at US$2,672.10 an ounce and the December copper contract was down 12 cents at US$4.53 a pound.

This report by The Canadian Press was first published Oct. 3, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

More Americans file for unemployment benefits last week, but layoffs remain historically low

Published

1 day ago

October 3, 2024

Anne Joseph

The number of Americans applying for unemployment benefits rose modestly last week but remains at healthy levels.

The Labor Department reported Thursday that applications for jobless claims rose by 6,000 to 225,000 for the week of Sept. 28. It was slightly more than the 221,000 analysts were expecting.

The four-week average of claims, which evens out some of weekly volatility, fell by 750 to 224,250.

Applications for jobless benefits are widely considered representative of U.S. layoffs in a given week.

Recent labor market data has signaled that high interest rates may finally be taking a toll on the labor market.

In response to weakening employment data and receding consumer prices, the Federal Reserve last month cut its benchmark interest rate by a half of a percentage point as the central bank shifts its focus from taming inflation toward supporting the job market. The Fed’s goal is to achieve a rare “soft landing,” whereby it curbs inflation without causing a recession.

It was the Fed’s first rate cut in four years after a series of rate hikes in 2022 and 2023 pushed the federal funds rate to a two-decade high of 5.3%.

Inflation has retreated steadily, approaching the Fed’s 2% target and leading Chair Jerome Powell to declare recently that it was largely under control.

During the first four months of 2024, applications for jobless benefits averaged just 213,000 a week before rising in May. They hit 250,000 in late July, supporting the notion that high interest rates were finally cooling a red-hot U.S. job market.

U.S. employers added a modest 142,000 jobs in August, up from a paltry 89,000 in July, but well below the January-June monthly average of nearly 218,000. September’s jobs report is due out Friday.

Last month, the Labor Department reported that the U.S. economy added 818,000 fewer jobs from April 2023 through March this year than were originally reported. The revised total was also considered evidence that the job market has been slowing steadily, compelling the Fed to start cutting interest rates.

Thursday’s report said that the total number of Americans collecting jobless benefits was down by 1,000 to about 1.83 million for the week of Sept. 21.

Separately on Thursday, some retailers said they are ramping up hiring for the holiday season, but fewer seasonal employees are expected to be taken on this year.

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