25 Jul 2013
Flash: China's 7% 'growth floor' speech fake? be wary on more stimulus - Nomura
FXstreet.com (Barcelona) - Following news on the New Beijing Journal on 24 July on Chinese Premier Li Keqiang underlying 7% as the "growth floor", and with media widely quoting the headline, Nomura questions the veracity of the comments.
Key quotes
"The quote in the news is not from an official source, and we believe it was misinterpreted. We cannot find the official press release that quotes Premier Li as saying "7% is the bottom", hence we cannot verify if such speech is fake."
"Even if the reported speech is true, we doubt Premier Li meant to say that the government would stimulate the economy again as Premier Wen did in 2009 and 2012 if growth drops below 7%. We think such stimulus would exaggerate the imbalance in the economy and worsen financial risks, which is against the government's policy objective."
Key quotes
"The quote in the news is not from an official source, and we believe it was misinterpreted. We cannot find the official press release that quotes Premier Li as saying "7% is the bottom", hence we cannot verify if such speech is fake."
"Even if the reported speech is true, we doubt Premier Li meant to say that the government would stimulate the economy again as Premier Wen did in 2009 and 2012 if growth drops below 7%. We think such stimulus would exaggerate the imbalance in the economy and worsen financial risks, which is against the government's policy objective."