Chinese premier looks to boost growth

China’s premier called for additional efforts to support growth yesterday, signalling Beijing’s willingness to take action after a recent series of economic indicators suggested that the world’s second-biggest economy will slow further in the second quarter.

“We should continue to implement a proactive fiscal policy and a prudent monetary policy while giving more priority to maintaining growth,” Premier Wen Jiabao said in comments reported by state news agency Xinhua.

Chinese exports rose by 4.9% in April, barely half the rate which economists had forecast, while imports fell far short of expectations. In addition foreign direct investment slid lower in the first four months of 2012.

The numbers released last week pointed to slower growth for China in the face of external headwinds that pushed economic growth in the first quarter down to 8.1%, the slowest pace in almost three years.

The latest Reuters poll showed that private sector economists expect China’s growth to ease to 7.9% in Q2 from an 8.1% annual rate in Q1. They forecast full-year growth of 8.2%.

Mr Wen said the central government will continue to strengthen and improve macro control efforts, carry out fine-tuning, boost domestic consumption and stabilise external demand, said the Xinhua report.

Earlier this month China’s central bank cut the amount of cash banks must hold as reserves, freeing an estimated 400bn yuan ($63bn) for lending to add to the roughly 800bn injected in two previous 0.5 percentage-point cuts.