(Bloomberg) -- Chinese President Xi Jinping and other top leaders highlighted several risks the economy still faces as growth rebounds this year, repeating the need for more self-reliance in key areas like technology in the face of growing competition from the US.
Xi and his No. 2, Premier Li Qiang, stressed the importance of innovation and competitiveness in separate meetings in the past few days. A vice commerce minister also said this weekend China will take steps to boost trade with major nations amid a slowdown in the global economy.
In a meeting with senior Communist Party officials on Friday, Xi pledged support for innovative companies as he urged them to break technological barriers. The president said private business growth would depend on removing institutional barriers that impede fair competition.
“The latest meeting sent a clear signal that reform is an important aspect of the Chinese modernization path,” Tommy Xie, head of Greater China research at Oversea-Chinese Banking Corp., said in a note Monday.
Li met with the first study group for the State Council, China’s cabinet, on Sunday to reiterate the importance of reform and striking a balance between development and security.
Chinese Vice Commerce Minister Wang Shouwen said at a separate press conference on Sunday the country would release guidelines intended to boost trade in its major overseas markets. He added that China would support the ability of firms to make better use of the Belt and Road Initiative.
The comments come against the backdrop of an economy that’s showing a rapid, although uneven, recovery. A surge in consumer activity and a rebound in the property industry propelled first-quarter growth to its fastest pace in a year. However, industrial output grew slower than expected and unemployment remains elevated.
“While headline growth looks solid, the underlying economy appears divergent,” Goldman Sachs Group Inc. economists including Hui Shan wrote in a Sunday research note.
Several economists have recently upgraded their forecasts for the year to close to 6% or higher, well above the official government target of around 5%.
More clues on how leaders are expected to steer the economy may come before the end of the month, when the Communist Party’s Politburo is likely to hold its next meeting.
The better-than-expected first quarter figures “took some pressure off policymakers to conduct broad-based easing, but the divergences underlying the economy call for targeted support,” the Goldman economists said.
While they expect the country’s broad monetary and fiscal stance to remain unchanged, they said some industry-level policies — such as for property and the internet — may be loosened further.
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