Premier Li puts on brave face about Chinese economy

Feels reforms can reinvigorate growth...

Premier Li puts on brave face about Chinese economy

Flag of China | File photo

Chinese Premier Li Keqiang took a strong, positive position on where the world's second-largest economy was heading today, as he remained firm that no "hard landing" or mass layoffs were in the country's future.

At the same time, he admitted that certain sectors, such as the heavy and petro-chemical industries, are suffering from overcapacity. 

Despite the 6.5% - 7% target for 2016 growth being questioned as overly optimistic of late, Xi insisted that it would be "impossible" for China to miss that goal.

Defending the government's reforms at the annual meeting of parliament, he suggested less red tape for businesses could have a positive impact.

Li said: "We are confident that as long as we continue to reform and open up, China's economy will not suffer a hard landing.

"Economic productivity is being held back by unnecessary government interference and we need to create a more level playing field and more oversight".

International critics argue that China will find it extremely difficult to fulfill its conflicting economic obligations.

In a research note, Julian Evans-Pritchard of Capital Economics said:

"Premier Li signaled that China would continue to implement reforms this year including cutting red tape (and) improving the portability of social welfare.

"But the government still shows little willingness to tolerate the pain associated with significant change.

"It says that cutting oversupply and restructuring the inefficient state sector is a priority for this year but appears determined to avoid major job losses".

According to Reuters, China can expect a lay off of 5-6 million state workers over the next several years.