Chinese Premier Li Keqiang hosted an unexpected video call for government officials across the nation on Wednesday to discuss the economy. More than thousands of officials attended the event.

During the call, Li Keqiang warned of bad consequences if authorities do not act aggressively to prevent the economy from going down further. He stressed that the growth must be positive in the second quarter.

Li told attendees that China’s economic growth now is falling out of a reasonable range, and the country will face a hard time recovering if its economy can’t keep growing at a certain rate.

Li’s call came after China’s April official data showed that the world’s second largest economy performed poorly due to severe Covid-lockdown measures from Beijing.

In addition, economists, experts, and credit rating agencies have cut China’s growth forecast for 2022 to just above 4%, compared to the government’s official target of 5.5%. Morgan Stanley even downgraded its growth to as low as 3.2%.

Li set out many goals for local officials to focus on for the rest of the year, calling on better balancing Covid controls and economic growth.

Experts raise the question that Li’s objectives seem to be in a dilemma as he wants to boost growth to pre-pandemic level while President Xi Jinping is pushing to maintain strict zero-Covid measures.

Trey McArver is co-founder of research firm Trivium China. Referring to Li’s move, McArver told Bloomberg, “He is being put in the impossible position of trying to rescue the economy without being able to adjust the one policy, zero-Covid, that is causing the most economic damage.”

For the government officials in charge of carrying out economic policy for quick recovery, they do not know who to listen to. Because Xi Jinping also wants them to focus on the zero Covid-19 strategy.

The Chinese Communist Party is about to hold the 20th National Congress later this year, where Xi Jinping is expected to be elected for a third term. Party cadres are very careful in handling Covid outbreaks because they do not want to make any mistakes that cost them their career.

Even though investors are optimistic over Li’ meeting, some senior officials told Bloomberg that this does not do much to change their top priority. It is controlling the Covid outbreak.

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