growth better, more policy steps ahead: premier
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[July 07, 2014]
BEIJING (Reuters) - China's
economic growth quickened in the second quarter from the
previous three months, but further modest government
support measures will still be needed, Premier Li
Keqiang said on Monday.
Speaking at a news conference with German Chancellor Angela Merkel,
who is visiting Beijing, Li said the Chinese economy still faces
downward pressure and that the government will increase its usage of
targeted measures to boost growth.
His cautiously optimistic remarks may boost market confidence ahead
of China's second-quarter economic report due on July 16. Analysts
polled by Reuters expects China's growth for the April-June period
to have steadied at 7.4 percent.
"China's economic performance in the second quarter has improved
from that in the first quarter. However, we cannot lower our guard
against downward pressures," Li said.
"We will keep up our composure and not adopt strong stimulus.
Instead, We will increase the strength of targeted measures," the
To lift China's flagging economic growth, which hit an 18-month low
of 7.4 percent in the first quarter of 2014, authorities have cut
taxes, ordered regional governments to speed up spending and reduced
the amount of cash that some banks have to hold as reserves.
Use of these so-called "targeted measures" are meant to help areas
of the economy with real business needs, and is a departure from the
past when China would cut rates or reserve requirements for all
banks and ramp up spending across the country.
But on the back of China's rapid credit growth in recent years, some
experts - including the International Monetary Fund - have urged
Chinese authorities to desist from dramatically loosening policy and
focus on pursuing needed reforms.
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A series of surveys of China's manufacturing and services sectors
suggests that growth in the world's second-largest economy may have
stabilized in recent months, though a cooling property sector is now
shaping up to be the biggest threat. Li said authorities will
further fine-tune policies and expressed confidence the government's
2014 growth target of around 7.5 percent can be met.
But he added that authorities do not plan any massive stimulus
(Reporting by Megha Rajagopalan and Aileen Wang; Editing by Kim
Coghill and Richard Borsuk)
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