China adjusting COVID rules will enable economy to pick up, says Premier Li Keqiang

China’s premier has publicly acknowledged the financial harm wrought by the COVID-19 pandemic and expressed his belief the relaxation of strict lockdown rules will help the economy “pick up”. 

Li Keqiang is the country’s second most powerful person and the most senior figure to speak about the recent “adjusting and optimising” of coronavirus restrictions which will see a large scale reduction in mass testing and some positive cases allowed to quarantine at home.

He also added China will take further measures to ensure vital sectors such as “production and logistics” are kept open.

He was speaking at a news conference following a face-to-face meeting with the leaders of six major international economic organisations including the International Monetary Fund (IMF), the World Bank and the World Trade Organisation (WTO).

His words will add further encouragement to both markets and people, buoyed by the strongest indications yet the zero COVID agenda is being abandoned.

Premier Li met with the six economic chiefs in the southern city of Huangshan.

It is the first time such talks have been possible since the pandemic.

The stated purpose was to strengthen multinational cooperation in order to confront the range of severe economic challenges facing the world.

China, the world’s second largest economy with vast global trade links, is seen as a vital player.

Premier Li stated China was committed to opening its economy to the world, countering concerns and accusations the country has become more closed and hostile to foreign investment in recent years.

He said the country was taking “accelerated steps to build an open economy”, and added: “China’s development and world development are closely connected, China needs the world and visa versa.”

He also said China “stands ready to act” when it comes to aid for poorer nations facing debt crises.

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While he trumpeted Beijing’s achievements in mitigating the worst impacts of the pandemic, he acknowledged that “this year China’s economy has traversed an extraordinary journey,” and noted the “implications to our efforts to maintain set targets and goals”.

The heads of the international organisations which included IMF managing director Kristalina Georgieva, director general of the WTO Ngozi Okonjo-Iweala and the president of the World Bank David Malpass, all expressed optimism for the “constructive” nature of the talks.

But they also acknowledged the massive headwinds facing the global economy and the “very real” risk of a worldwide recession.

“China’s performance matters to China but it also matters to the world economy as well” said Ms Georgieva.

“Multilateral cooperation is essential first, on trade, and addressing the risks of fragmentation that are coming at the time we need each other the most.”

Mr Malpass specifically highlighted the recent relaxations to testing and quarantine requirement stating that a “reopening that reduces domestic and international disruptions was critical”.