It will not be easy for China to maintain a growth rate of 7%, Premier Li Keqiang said on Sunday, adding that there were considerable downward pressures on the economy.
He, however, added that the government was in a position to maneuver its economic policies if the growth rate plummeted to a position where it could hurt employment and income in an economy worth more than $10 trillion.
Addressing a press conference at the conclusion of China’s annual session of Parliament, Li said
“In recent years, we have not taken any strong, short-term stimulus policies, so we can say our room for policy manoeuvre is relatively big, the tools in our toolbox comparatively many,” Li said.
“If the slowdown in growth affects employment and incomes, and approaches the lower-limit of a reasonable range, we will stabilise policies and the market's long-term expectations for China,” he said.
“I recognise that there is considerable downward pressure on China's economic growth and we still face multiple challenges. This requires that the government must strike a proper balance between maintaining steady growth and making structural adjustments,” he said.
A 7% growth target is China's lowest in many years.
Li added that China would step up its efforts in streamline government administration and mandate more powers to lower-level governments to further vitalise the market.
“The reform by reducing the powers held in the hands of the government has helped tackle the downward pressure,” Li said.
The Premier, who is responsible for the Chinese government’s economic policies, said the pain caused by the government's self-imposed reform was becoming more acute.
“This is not nail clipping,” he said. “This is like taking knife to one's own flesh.”
Li took 17, mostly economy-related questions, at the two-hour interaction with the press at the Great Hall of the People attended by both domestic and international media.
“We want to further upgrade the Chinese economy to medium high level of development and maintain balance economic growth at a medium high speed. We want pursue growth that has improved quality and performance,” the Premier said.
On the state of the real estate market, Li said the sector will have steady and sound growth in the long run. He said the government encourages people to buy homes for their personal use or buy second homes.
China is still a large developing country. Housing is not just an economic issue, but also one that concerns people's livelihood, he said, adding the Chinese government needs to meet the basic housing needs of low-income people in China.
The government will take more steps this year to rebuild urban rundown areas homes and rural dilapidated homes, with one million units each.