BEIJING (Reuters) – China’s economy is recovering but domestic demand is still insufficient, posing obstacles for an economic transformation, according to a Politburo meeting held on Friday, state media reported.
The triple pressures facing the economy – shrinking demand, supply shocks and weakening expectations – have eased amid better-than-expected first quarter growth, according to the meeting readout.
“Market demand has gradually recovered, economic development has shown an upward trend and the economic operation has achieved a good start,” state media reported.
However, “the momentum is not strong and demand remains still insufficient. Economic transformation and upgrading are facing new obstacles and promoting high-quality development needs to overcome many difficulties and challenges.”
The Politburo meeting, a top decision-making body of the Communist Party, stressed that restoring and expanding demand is the key to a durable economic recovery.
Proactive fiscal policy should be stepped up and work alongside monetary policy to boost, according to the meeting.
As pockets of weakness remain and a full-blown economic recovery appears some way off, the Politburo meeting said household income of urban and rural residents should be increased in order to boost services consumption, while private investment should be also driven up effectively.
The world’s second-biggest economy has struggled to fully recover despite the lifting of tough COVID restrictions in December, as a tepid property recovery, local debt risks and slowing global growth have dented confidence and overall demand.
(Reporting by Ellen Zhang, Kevin Yao and Beijing Newsroom; Editing by Jacqueline Wong and Shri Navaratnam)
