BEIJING (SCMP) - China should take forceful measures to raise economic growth above 5 per cent in the second quarter, while remaining on high alert for possible capital outflows, policy advisers said.
China’s economy grew by 4.8 per cent in the first quarter, but lockdowns in major cities such as Shanghai are taking an increasing toll on the economy.
The weeks-long lockdown in the country’s key commercial and logistical hub is expected to eat into second-quarter growth, challenging Beijing’s already ambitious growth target of “around 5.5 per cent” this year.
“First-quarter growth failed to pass 5 per cent as we had expected, mainly because most economic indicators slowed down in March,” Wang Yiming, a member of the central bank’s monetary policy committee, told an economic forum in Beijing on Sunday.
Coronavirus controls, Russia’s war in Ukraine and the U.S. Federal Reserve’s rate increases will continue to put downward pressure on the economy in the coming months, he said.
“Therefore, it is very important that we can effectively contain the pandemic, especially by early May, and take stronger macro policies to counter the hit from the pandemic and to bring economic growth in the second quarter back to the level above 5 per cent. This will be the foundation for realizing the full-year target,” he said.
The remarks came at the time when authorities promised to unveil new measures to shore up market sentiments amid growing concerns about Beijing’s handling of multiple economic headwinds.
Zhu Guangyao, a former finance minister, told the same forum that the U.S. monetary policy shift was expected to come at an “unprecedented intensity and pace” which will be “the biggest pressure for us”.
Foreign investors have also slashed bond, equity and yuan holdings this year. The yuan-U.S. dollar exchange rate retreated to a one-year low this week.
Zhu said China should clearly monitor the U.S. Federal Reserve’s timetable to be on high alert for capital flows from China and emerging markets, adding: “This is indeed our top priority.”
Wang also called on authorities to “reasonably optimize” pandemic controls.
“When insisting on the zero-COVID policy, we should make sure the controls are more precise and ensure logistics and the supply chain are unimpeded,” he said.