China signals no big stimulus is coming, while Covid controls remain

cnbc.com:

BEIJING — China's top leaders signaled Thursday that no big stimulus for economic growth was on the way, and downplayed the necessity of achieving the «around 5.5%» GDP target.

In the second half of the year, authorities said they would stabilize employment and prices, according to a state media readout of the leaders' meeting Thursday. Chinese President Xi Jinping headed the economic meeting, held regularly with China's leadership, known as the Politburo.

That high-level mention of stabilizing prices indicates there won't likely be any additional expansionary policies, Wang Jun, a director at the China Chief Economist Forum, said in a phone interview. He noted high inflation overseas, and expected China would face greater inflationary pressure in the coming months.

One of the largest stimulus announcements came in late May when China's State Council, the country's top executive body, announced 33 economic support measures ranging from tax refunds to infrastructure investment.

While Wang expected continued use of credit and local government bonds to support the economy, he said authorities would not likely «force» 5.5% growth. That's according to a CNBC translation of his Mandarin-language remarks.

China's gross domestic product grew by just 2.5% in the first half of the year from a year ago, after the economy slumped in the second quarter. The country's worst Covid-19 outbreak since 2020 locked down the metropolis of Shanghai in April and May, while related restrictions in other parts of China hit business activity.

However, on Thursday China's leaders did not signal any change in the country's «dynamic zero-Covid» policy.

«Regarding the relationship between pandemic control and the development of the economy and