(Updates with quotes from Li, background)
BOAO, China, April 10 Chinese Premier Li Keqiang
ruled out major stimulus to fight short-term dips in growth in
the world's second-biggest economy, dashing investor hopes that
the government would aggressively combat a slowdown in activity.
Li stressed on Thursday that job creation was the main
policy priority, telling an investment forum on the southern
island of Hainan that it did not matter if the growth was a
little below the official target of 7.5 percent for this year.
"We will not take, in response to momentary fluctuations in
economic growth, short-term and forceful stimulus measures," Li
"We will instead focus more on medium- to long-term healthy
His comments are among the clearest yet on the government's
plans for the economy, which has rattled global investors this
year with a surprisingly lacklustre performance.
China has less and less room to rely on policy tools to
support the economy for fear of inflating local debt risks, the
top economic planning agency said on Wednesday.
Trade data on Thursday showed Chinese exports fell for the
second consecutive month in March, the worst showing in over
four years, while imports fell by the most in 13 months.
An almost unabated run of disappointing data this year has
fuelled investor speculation the government would loosen fiscal
or monetary policy more dramatically to shore up activity.
But authorities so far have resisted broad stimulus
measures. Earlier this month, they announced tax breaks for
small firms and plans to speed up some infrastructure spending.
Li said that China was positioned to sustain a reasonable
level of growth over the long term.
"We have set our annual economic growth target at around 7.5
percent," he said. "It means there is room for fluctuation. It
does not matter if economic growth is a little bit higher than
7.5 percent, or a little bit lower than that."
Investors have long steeled themselves for growth to slow as
China's economy matures, especially as the government tries to
steer it away from investment- and export-driven growth and
towards consumption-led activity.
But the extent of the slowdown this year has still been a
shock to some.
Data on April 16 is forecast to show the economy grew an
annual 7.3 percent in the first quarter, the weakest rate since
early 2009 in the immediate aftermath of the global financial
Economists have repeatedly cut their growth forecasts for
2014, with a Reuters poll showing growth is forecast at 7.4
percent, a shade below the government's 7.5 percent target.
(Reporting by Aileen Wang in BOAO and Koh Gui Qing in BEIJING;
Editing by John Mair)