Premier Li Keqiang said Wednesday that China’s economy will not suffer a hard landing and there are more hopes than difficulties for the world’s second largest economy.
“As long as we stay on the course of reform and opening-up, China’s economy will not suffer a hard landing,” Li told a press conference following the conclusion of the country’s annual legislative session.
The premier said global economic growth is sluggish and China has been affected by the weak performance. The country is also going through a transition and some deep-seated problems, which have built up over the years, have become acuter.
“All these have added to downward pressure on China’s economic growth,” said Li.
Another prominent feature of the Chinese economy is that growth prospects for different regions and sectors have become more divergent, according to the premier.
“There are both difficulties and hopes for China’s economy. But given the underlying trend and fundamentals, there are more hopes than difficulties,” said Li, adding that the leadership has full confidence in the bright future of the economy.
China has enormous potential in its big market, and there is immense creativity among the people, said the premier.
The government is still overreaching itself in some aspects of economic operations and it needs to take more actions to ensure a level playing field on the market.
“I believe that reform will further stimulate market vitality and public creativity. With the wisdom and the hard work of our people, we will be able to withstand the downward pressure,” said Li.
The supply-side structural reforms China has been pursuing, including streamlining administration, delegating powers of the government and cutting corporate taxes, will unleash more market vitality.
“At the same time, new forces that drive China’s development are fast taking the shape in a way that has gone beyond our expectations,” said Li.
In the past few years, despite slower growth, China has achieved fairly sufficient employment. Last year alone, it generated another over 13 million urban jobs.
In the first two months of 2016, our service sector expanded 8.1 percent, including the services for the high-tech and R&D.
In the meantime, China is upgrading traditional growth drivers, where there is still much the government can do, because China remains at a stage of industrialization and urbanization, according to the premier.
“There is much room for us to boost industrialization and urbanization that represent the largest source of domestic demand,” said Li, adding that in China’s central and western regions, there is enormous room for more effective investment.
Propelled by the twin engines — the new growth drivers and upgraded traditional ones, China’s economy will be able to get beyond difficulties and rise to a more promising level, said Li.
Last year, global economic growth slid to a six-year low. But still China managed to meet its economic development target of around 7 percent.
Instead of resorting to massive stimulus measures, the country has chosen a much harder but sustainable path of development — pursuing structural reforms.
The premier said there may be small ups and downs in the future. But in case there is any sign that the economy may slide out of its appropriate range, the government will employ innovative means to exercising macroeconomic regulation to ensure steady economic performance.
“We have a good reserve of policy instruments in our tool kit,” said Li.
