Chinese Premier Li Keqiang Talks about China’s Economic Situation

Chinese Premier Li Keqiang Talks about China’s Economic Situation

Estimated time to read the article : 8 min, 51 secs

On 10th September, 2015, the World Economic Forum held the Ninth Annual Meeting of the New Champions themed “Charting a New Course for Growth” in Dalian City, China, convening the best and brightest from industry, academia and government to explore new paths to prosperity based on innovation, collaboration and partnership. Chinese Premier Li Keqiang attended the opening ceremony of the Annual Meeting and delivered a special speech on the current status and tendency of China’s economy and the future of world development. Excerpt of his speech reads as follows.

At the moment, global economic recovery is still weak. Many international institutions have downgraded their global economic forecast. The theme of the meeting--Charting a New Course for Growth--reflects our collective wisdom and consensus, and points the way for the future. It is therefore highly relevant.

The Chinese economy is stable and moving in a positive direction despite the moderation in speed. Although difficulties remain, there are more opportunities than challenges. The ups and downs in the economy may have formed the shape of a curving wave, but the underlying trend remains to be positive. Given the slowdown in global growth, the 7% growth China achieved in the first half of the year, which is among the highest of the world’s major economies, is not at all easy. At the same time, China’s economic structure is rapidly improving, and new economic growth areas are rapidly taking shape. China’s steady economic development has benefited the world. The actual amount of commodities China imported grew steadily. Outward investment and the number of outbound tourists have both seen rapid growth. China contributed about 30% to global growth. However, the Chinese economy is confronted with many difficulties and facing downward pressure. The past two months have seen a slip or fluctuation in certain indicators. Yet, the policies and measures adopted in the previous state are starting to pay off. The fundamentals underpinning a stable Chinese economy have not changed. The fiscal deficit ratio of the central government is relatively low compared with other major economies. There are still many tools at our disposal for innovative macro regulation. We are capable of meeting the main goals and tasks set for economic and social development this year.

We believe that the Chinese economy is on the right track and its future will be even brighter. Our confidence is based on the sound foundation, condition and momentum of economic growth. China is going through the process of a new type of industrialization, IT application, urbanization and agricultural modernization. China has a vast territory and diverse industries. The Chinese economy is supported not by a single pillar but multiple pillars. The economy is highly resilient and shock-resistant. We are accelerating structural reform and pursuing an innovation-driven development strategy to fully unleash the potential of economic growth. We want to make sure that the economy maintains medium-high speed of growth and moves to medium-high level of development.

Reform in the financial sector has been advanced in accordance with market principles and rule of law. An open and transparent capital market that enjoys long-term, steady and sound development is being fostered. Meanwhile, we are stepping up risk management to defend our bottom line of no regional or systemic financial risk. Going forward, we will continue to ease restrictions on the access of private capital to the financial sector to better support the real economy. We will continue to keep the RMB basically stable at an adaptive and equilibrium level, and gradually make the RMB convertible under the capital account. By the end of the year, the China International Payment System (CIPS) will be launched to support the further development of offshore RMB market.

For China to advance structural reform, it is important to unleash the infinite creativity of the people and promote mass entrepreneurship and innovation. Measures have been taken to streamline administration, delegate government power, strengthen regulation and improve services. Consequently, the people’s creativity and entrepreneurial passion have been unlocked. Over 10,000 new businesses have been registered on a daily basis in China. Mass entrepreneurship and innovation not only provides strong support for our efforts to cushion the downward pressure and expand employment. It also represents an innovative step in the income distribution model and is effective in promoting social justice. By promoting PPP, franchising and other market-oriented approaches, we have continued to encourage and guide the participation of private investment in the development, operation and management of public goods and services. In addition, we have relaxed market access for foreign investment. As a result, a new model of diverse supply of public goods and services has been forged.

China will open still wider to the world. There will be no change in China’s overall policy on FDI. Specific steps will be taken to attract more foreign investment through greater openness. What has happened since the international financial crisis shows that quantitative easing alone cannot address the structural hindrances to growth. What is important is to strengthen the real economy. This would require that countries advance structural reform at home and strengthen international cooperation. Along this line, China has come up with the initiatives to build the Silk Road Economic Belt and the 21st Century Maritime Silk Road, and to promote global cooperation on production capacity. We believe these initiatives could help further open up country and forge a more balanced and inclusive global industrial chain. This in turn could pool the comparative strengths of all countries and foster a global community of common interests and development for the purpose of win-win, inclusive and common progress.

Countries are at different stages of development. Global cooperation on production capacity will match supply with demand effectively, and generate more demands through innovation on the supply side. Such an approach will produce multiple benefits and win-win results among all parties. China’s role could be one of a bridge that links the parties together.

China is committed to peaceful development and a win-win strategy of opening-up. China will work with countries to advance structural reform and push for an improved multilateral trading regime that is free, open and non-discriminatory. We can work together to promote inclusive and balanced growth and green and sustainable development, and join hands to foster a community of common interests and development and create an even better future for mankind.