According to Chinese state media, China’s top leaders said Friday during a regular meeting that domestic demand is still insufficient.

The judgement came after China announced 4.5% GDP growth in the first quarter, which prompted several investment firms to boost their economic estimates for the year.

“At present the positive turn in China’s economy is primarily one of a recovery. Internal drivers still aren’t strong, and demand is still insufficient,” a state media readout of the meeting said in Chinese, translated by CNBC.

“Economic transformation and upgrade faces new resistance, and the promotion of high quality development still needs to overcome many difficulties and challenges,” the readout said.

Chinese President Xi Jinping presided over Friday’s Politburo meeting of Chinese leaders.

The gathering also advocated for increasing people’s income sources and improving employment opportunities, particularly for university graduates.

In March, the unemployment rate for those aged 16 to 24 jumped to 19.6%, close to a record high set in July 2022. Overall unemployment in cities has remained substantially lower, at or over 5%.

According to Bruce Pang, chief economist and head of research for Greater China at JLL, the meeting summary did not signal any change in fiscal and monetary policy.

He noted that the discussion focused on increasing consumption and stabilising investment, stressing that the criticism about a lack of “internal” motivation is centred on soft private sector investment and chances to strengthen it.

The Politburo meeting also particularly requested that new energy vehicles be developed further, battery charge facilities be built, and power systems be transformed.

In terms of artificial intelligence, officials stated that China must “attach importance” to “general” AI, foster innovation, and focus on risk mitigation.

The artificial intelligence chatbot ChatGPT skyrocketed in popularity in the first quarter, forcing several Chinese enterprises to double-down on similar offerings. So far, public releases have primarily targeted business clients rather than the general public.

Beijing published drafted rules on AI-generated content for public consultation this month.

(Adapted from CNBC.com)

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