Official: Foundation of China's Economic Recovery not Solid Enough

People walk on a street as the coronavirus disease (COVID-19) outbreak continues in Beijing, China, January 13, 2022. REUTERS/Thomas Peter
People walk on a street as the coronavirus disease (COVID-19) outbreak continues in Beijing, China, January 13, 2022. REUTERS/Thomas Peter
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Official: Foundation of China's Economic Recovery not Solid Enough

People walk on a street as the coronavirus disease (COVID-19) outbreak continues in Beijing, China, January 13, 2022. REUTERS/Thomas Peter
People walk on a street as the coronavirus disease (COVID-19) outbreak continues in Beijing, China, January 13, 2022. REUTERS/Thomas Peter

The foundation of China's economic recovery is not solid enough, a senior Communist Party official said on Saturday, warning of possible spillover effects from global economic problems.

Some countries have to play a balancing act as they try to stabilize their economies, prices and financial markets, said Han Wenxiu, deputy head of the party's office for financial and economic affairs, adding that the global economy was at risk of stagflation.

Such risks come as many developed countries aggressively tighten their monetary policy causing problems for banks as well as bringing foreign debt woes and financial market turmoil, he said at a government-organized China Development Forum, without naming any specific countries.

As a result, global supply chains face restructuring, Reuters quoted him as saying.

"The foundation of China's economic recovery is not yet solid enough," Han said.

Recent economic data has shown that China's economy picked up from COVID-19 slumps after the government abandoned its zero-COVID strategy late last year.

China is confident of reaching its annual economic growth target of around 5%, Han said.

He said the growth target had taken into account the need to expand employment and improve people's livelihoods, as well as the potential growth capacity and various difficulties.

China has no apparent inflation or deflation at the moment, and it has a relatively large amount of room to maneuver on monetary policy, he said.

Han also said China would continue to expand market access and welcome foreign investment into the world's second largest economy.

"China welcomes companies from all countries to come and invest and expects foreign firms to hold a long-term view and develop extensively in the market," Han said.



Putin Says Recession in Russia 'Must Not Be Allowed to Happen'

Putin wants officials to keep a 'close eye on all indicators of the health of our industries, companies and even individual enterprises'. Olga MALTSEVA / AFP
Putin wants officials to keep a 'close eye on all indicators of the health of our industries, companies and even individual enterprises'. Olga MALTSEVA / AFP
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Putin Says Recession in Russia 'Must Not Be Allowed to Happen'

Putin wants officials to keep a 'close eye on all indicators of the health of our industries, companies and even individual enterprises'. Olga MALTSEVA / AFP
Putin wants officials to keep a 'close eye on all indicators of the health of our industries, companies and even individual enterprises'. Olga MALTSEVA / AFP

President Vladimir Putin on Friday urged officials not to let Russia fall into recession "under any circumstances", as some in his own government warned of a hit to economic growth.

Economists have warned for months of a slowdown in the Russian economy, with the country posting its slowest quarterly expansion in two years for the first quarter of 2025, reported AFP.

The Kremlin has said this was to be expected after two years of rapid growth as it ramped up military expenditure to fund the Ukraine campaign, but officials including the country's economy minister have raised alarm about possible pain ahead.

"Some specialists and experts are pointing to the risks of stagnation and even a recession," Putin told attendees at Russia's flagship economic forum in Saint Petersburg.

"This must not be allowed to happen under any circumstances," he said.

"We need to pursue a competent, well-thought-out budgetary, tax and monetary policy," he added.

The Russian economy grew in 2023 and 2024 despite the West's sweeping sanctions, with massive state spending on the military powering a robust expansion.

But analysts have long warned that heavy public investment in the defense industry is no longer enough to keep Russia's economy growing and does not reflect a real increase in productivity.

At his address to the forum on Friday, Putin was upbeat about Russia's economic prospects and denied the economy was being driven solely by the defense and energy industries.

"Yes, of course, the defense industry played its part in this regard, but so did the financial and IT industries," he said.

He said the economy needed "balanced growth" and called on officials to keep a "close eye on all indicators of the health of our industries, companies and even individual enterprises."