China will ensure stable economic growth in Q1, premier says

Cars drive past construction sites in Beijing's central business area
FILE PHOTO: Cars drive past construction sites in Beijing's central business area, China November 21, 2018. Picture taken November 21, 2018. REUTERS/Jason Lee

January 5, 2022

BEIJING (Reuters) -China will ensure stable economic growth in the first quarter of 2022, state radio quoted Premier Li Keqiang as saying on Wednesday.

The government will implement greater tax and fee cuts for businesses and would provide targeted support for COVID-affected sectors such as services, Li was quoted as saying.

China would extend existing tax breaks and increase deductions for research and development (R&D) expenses when companies calculate their income tax, Li added.

Facing new downward pressures on its economy, China aims to stabilise key sectors such as employment, financing, trade and investment, Li said.

The world’s second-largest economy faces multiple challenges heading into 2022 because of a property downturn and strict COVID-19 restrictions that have hit consumer spending.

Zhang Ming, senior economist at the Chinese Academy of Social Sciences, a top government think-tank, said in a report that China’s economy could grow 5.3-5.5% in 2022.

The government would adopt “more expansionary” policies this year to prevent growth slowing further from the fourth quarter of last year, Zhang said.

Some analysts estimate fourth-quarter gross domestic product growth may have dipped below 4% from the 4.9% pace in the previous quarter, although growth in 2021 could still be about 8%, above the official target of over 6%.

(Reporting by Kevin Yao and Beijing newsroom, Editing by Louise Heavens, Gareth Jones and Alex Richardson)