China’s Li pledges growth support as holiday spending falls

BEIJING – China’s Premier Li Keqiang called for more policies to drive up consumption in the economy as latest figures show a further plunge in travel and spending over a three-day public holiday amid tight Covid-19 controls.

Tourism revenue declined 22.8 per cent to 28.7 billion yuan (S$5.8 billion) over the Mid-Autumn Festival from a year ago.

Compared with pre-pandemic levels in 2019, revenue was down 39.4 per cent, worse than last year’s 21.4 per cent drop, according to figures from the Ministry of Culture and Tourism.

The number of trips fell 16.7 per cent to 73.4 million from the same period last year.

The figures came as China’s State Council pledged more support to stabilise the economy.

At a meeting on Sept 8, Premier Li called for efforts to solve the “key problem of insufficient demand” in the economy and boost consumption as a main growth driver.

He pledged to further expand investment in order to create demand and lift confidence, according to a report by the official Xinhua News Agency published Monday.

China “will adopt multiple measures to stabilise growth, employment and prices,” Mr Li said.

The economy is facing “slight fluctuation” as it recovers, and the current stage is a critical one that requires greater urgency, like when one climbs up a hill facing headwinds, he said.

Ms Liu Peiqian, chief China economist at NatWest Group, said the focus of the State Council meeting was on implementing policy measures already outlined, rather than a ramp-up of new support.

“It did not announce any new or additional stimulus but the focus is still largely on effectively implementing what has been in place,” she said.

An emphasis on monitoring the progress of the support measures could mean more policy announcements from local governments, she said.

Beijing’s push to boost growth has centred around increasing infrastructure spending in the economy and giving tax breaks to businesses hurt by Covid-19 restrictions.

At the State Council meeting, Mr Li called for faster construction of infrastructure projects and more long-term bank loans to support them.

He also called for an increase in infrastructure funding from state policy banks based on the actual need of local areas.