Chinese Premier Warns Little Room for Government Stimulus
Created: 2013-05-15 15:04 EST
China’s Premier Li Keqiang surprised many observers on Wednesday, when he was quoted as saying there would be little government stimulus for economic growth.
This is in contrast to Wen Jiabao, Li's predecessor, who rolled out a 4 trillion yuan stimulus during the 2008 financial crisis.
During a telephone conference with officials on Monday, May 13, Li reportedly said that, quote, “there is an over-reliance on government-led and policy driven measures to stimulate growth”. He continued to warn that this is unsustainable, and would create new problems and risks.
His words were officially released here on Tuesday. At least on paper, this will mark a big shift in how the Chinese regime runs the economy, and its use of the free market. It will also allow investors more options for where to put their money.
Economic data coming out of China has been disappointing, and market watchers have been expecting stimulus announcements from the government.
On Wednesday, the Wall Street Journal reported that 12 economists it surveyed downgraded their forecast for China’s economy, compared to earlier in the year.