China to keep economy within reasonable range, act to ease commodity prices

FILE PHOTO: FILE PHOTO: Cargo ship carrying containers is seen near the Yantian port in Shenzhen, following the novel coronavirus disease (COVID-19) outbreak, Guangdong
FILE PHOTO: A cargo ship carrying containers is seen near the Yantian port in Shenzhen, following the novel coronavirus disease (COVID-19) outbreak, Guangdong province, China May 17, 2020. REUTERS/Martin Pollard

July 13, 2021

BEIJING (Reuters) – China will keep its economic operations within a reasonable range over the next 18 months and take “comprehensive measures” to ease rising commodity prices, Premier Li Keqiang was cited as saying on the government’s website on Tuesday.

Giving an outlook for the second half of 2021 and next year at a meeting with economic experts and entrepreneurs on Monday, Li said China would maintain continuity and stability in its macro policies and would not resort to flood-like stimulus, according to the statement.

China’s central bank last week said it would cut the amount of cash banks must hold as reserves, releasing around 1 trillion yuan ($154.5 billion) in long-term liquidity to underpin a post-COVID-19 recovery that is starting to lose momentum.

The domestic and international environment remains complicated and there are many uncertain and unstable factors, Li was cited as saying.

“In particular, the sharp rise in commodity prices has increased companies’ costs,” he added. “Small, medium and micro-enterprises have greater difficulties.”

He did not specify what measures would be taken to alleviate the situation.

China, the world’s biggest importer of most major commodities, has already made several attempts to stall a surge in prices for everything from iron ore to coal to ease the pressure on businesses, including stepping up inspections on trading platforms and releasing state reserves.

China would oppose monopolies and unfair competition to allow small companies room to grow, Li added.

($1 = 6.4731 Chinese yuan renminbi)

(Reporting by Stella Qiu, Roxanne Liu and Ryan Woo; Additional reporting by Tom Daly; Editing by Andrew Heavens and Alex Richardson)