* China Premier Li says policies prepared to aid economy
* Says to speed up investment in poor areas
* Analysts say speech aims to reassure worried investors
(Adds fresh quotes)
By Aileen Wang and Jonathan Standing
BEIJING, March 28 China's Premier Li Keqiang
sought to reassure jittery global investors that Beijing was
ready to support the cooling economy, saying the government had
the necessary policies in place and would push ahead with
Recent weak economic data and mounting signs of financial
risks have dimmed the outlook for the world's second-largest
economy, sparking talk of imminent government action or even a
mini-stimulus plan to shore up growth.
"They don't want investors and businesses to lose
confidence. So obviously they want to make it clear they have
the ability to step in if necessary. So I think that's probably
the main point behind it," said Julian Evans-Pritchard, China
economist at Capital Economics in Singapore.
In a speech to a meeting in China's northeast made on
Wednesday and reported by the Xinhua news agency early on
Friday, Li said the government had policies well prepared and
would roll out targeted measures step by step to aid the
"We have gathered experience from successfully battling the
economic downturn last year and we have policies in store to
counter economic volatility for this year," Li said.
"We will launch relevant and forceful measures according to
what we have planned in our government work report," he said,
referring to his report to China's annual parliament session
Among those measures are speeding up construction of basic
infrastructure, including railways, highways and water
conservation projects in the central and western provinces, as
well as boosting trade and cutting companies' financing costs.
"The overall performance in the economy so far this year is
relatively stable and we saw some positive changes, but we
cannot neglect the increasing downward pressure and
difficulties," he said.
State radio later quoted Li as saying that China's economic
growth was still within a "reasonable range" as the job market
remained stable and inflation was "better than expected.
"Whether we could safeguard relatively full employment is
very important, but currently we see no apparent employment
pressures," he was quoted as saying.
Li has said that China's economy must grow 7.2 percent
annually to create 10 million jobs a year.
China's exports unexpectedly tumbled last month and other
economic data and business sentiment surveys have consistently
undershot expectations, suggesting the economy's first quarter
performance was the weakest in five years.
SENSE OF UNEASE
Adding to market jitters are signs of financial strain -
China's first ever bond default earlier this month, a bankruptcy
of a small property developer and a run on small rural banks in
one of China's coastal provinces earlier this
While isolated and of limited scale, the events feed into
growing sense of unease about risks stemming from a combination
of a rapid rise in corporate debt and slowing economy.
But Li said the economy was robust enough to fend off
"We must also note that China's economy has quite strong
tenacity and large wiggle room."
Market reaction to Li's comments was muted, with only Hong
Kong shares ticking up.
"The market reaction really hasn't been that great as these
comments have been said many times before," said Du Changchun,
an analyst at Northeast Securities in Shanghai.
"No matter whether you look at industry performance or
economic data, things aren't looking too optimistic. So even if
he (Li) says this, unless we see some positive policies the
market will not go up too much."
China has set a GDP growth target of around 7.5 percent for
2014, which some economists said could be too ambitious after a
likely weak first quarter.
The government itself has said that the target is not fixed
and that growth near that level would also be acceptable.
However it has also pledged to boost employment, meaning that it
must keep growth near the target or risk failing to meet its job
Other analysts said it is not easy for Beijing to turn on
the stimulus taps, given an already acute overcapacity problem
in some industries and the current government focus on putting
structural reforms ahead of growth.
"Those measures Li mentioned were not new. It only means
government will start work on projects that have already been
approved," said Xiao Bo, economist at Huarong Securities in
"It's impossible for the government to unveil stimulus
policies as we haven't solved the problems left over from the 4
trillion yuan spending," he said, referring to China's big
stimulus package unveiled in late 2008 in response to the global
(Additional reporting by Adam Rose and Xiaoyi Shao in Beijing
and Natalie Thomas in Shanghai; Editing by Tomasz Janowski)