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There's still plenty of space for macroeconomic policies to be expanded because consumer price growth is "relatively low" and the central government's debt level is not high, Li said during a keynote speech at the China Development Forum on Sunday. China's overall demand is "still insufficient," he said.
While Li acknowledged that many are concerned about risks in China's property sector and local government debt, he said "some difficulties and problems are not as serious as people think." Steps taken to limit risks in those areas have shown positive development, he added.
The world's second-largest economy has reported a solid start to 2024, with growth in exports, industrial production and investment beating expectations. That has reduced the urgency for authorities to add stimulus in the short term, though economists say more policy support is needed to reach the ambitious economic growth target of around 5% this year.
The longer-term outlook faces a number of challenges, including a deflation streak not seen since the 1990s, an extended property downturn and low confidence among overseas investors. Foreign businesses' new direct investment into China slumped to a 30-year low in 2023 amid rising geopolitical tensions and higher interest rates elsewhere.
Top officials have vowed to focus on boosting foreign investments this year.
International CEOs including Apple Inc.'s Tim Cook, Pfizer Inc.'s Albert Bourla and FedEx Corp.'s Raj Subramaniam are set to participate in panel discussions. While Chinese premiers typically hold a meeting with business chiefs at the forum, the two-decade tradition may be broken this year with the Wall Street Journal reporting President Xi Jinping may instead gather with company leaders after the event.
Li highlighted several measures the government is planning to take to boost domestic demand this year. They include reducing barriers to a unified domestic market, granting urban residency to people who have moved to cities from the countryside, as well as a campaign to encourage consumers and businesses to replace old goods and equipment.
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Subscribe to The Economic Times Prime and read the ET ePaper online.