Source: CNBC
The world's number-two economy will cultivate new growth drivers to become an innovation-driven country, Chinese Premier Li Keqiang declared on Monday.
Addressing the World Economic Forum (WEF) in Tianjin, also known as the "Summer Davos," Li focused the bulk of his speech on promoting entrepreneurship and highlighting policies catering to the sharing economy.
"We are embracing a new round of industrial revolution," he said. "We need to implement innovation-driven development."
The measures Li touted included pushing ahead with the Internet Plus initiative, a Chinese program aimed at boosting its mobile internet, e-commerce and cloud computing sectors in the international market. China would also ensure that the Internet of Things (ioT), cloud computing and other information technologies were applied to everyday life, Li said.
These new drivers would play a bigger role in securing employment and increasing wages going forward, as well as helping the country maintain a medium-to-high growth rate and opening up new economic prospects, he added.
"The sharing economy gives everyone a fighting change to achieve their dreams," the Premier said.
Li's focus on innovation comes as Beijing move away from resource and investment-fueled growth to one led by consumption, tolerating dramatically slower gross domestic product (GDP) as a result.
In an attempt to address bubbling market concerns about a deep economic slowdown, Li reiterated that the economy remained stable.
"China will not head for a hard landing, we are capable of meeting primary targets for economic and social development this year," he told the gathering in Tianjin.
He pointed to steady rises in corporate profits within the industrial sector, service-sector expansion, stable consumer price inflation and narrowing declines in producer price inflation as justification for his faith in a soft landing for China's economy. He also noted the government's progress in job creation, noting that 5.7 million new jobs were created in urban sectors, marking 58 percent completion of Beijing's annual job-creation target.
Alluding to criticism that China was sitting on a bad-debt bubble, Li said that China's central government debt ratio was about 16 percent, better than its Western counterparts, and that Beijing would create conditions that would allow for lower corporate leverage ratios and financing costs.
Despite market speculation that the renminbi would depreciate further, Li repeated that the country's economic health did not warrant devaluation and said the currency would remain stable.
But Li was also quick to acknowledge the risks accompanying China's transformation.
"Difficulties can't be underestimated…We will implement proactive fiscal policy with greater efficiency, maintain prudent monetary policy and channel more resources to strengthen weak links," he said.
"Short-term fluctuations in growth are unavoidable, and there may be changes to traditional economic indicators but we should understand that the changes brought on by development of the new economy aren't fully visible yet."
The world's number-two economy will cultivate new growth drivers to become an innovation-driven country, Chinese Premier Li Keqiang declared on Monday.
Addressing the World Economic Forum (WEF) in Tianjin, also known as the "Summer Davos," Li focused the bulk of his speech on promoting entrepreneurship and highlighting policies catering to the sharing economy.
"We are embracing a new round of industrial revolution," he said. "We need to implement innovation-driven development."
The measures Li touted included pushing ahead with the Internet Plus initiative, a Chinese program aimed at boosting its mobile internet, e-commerce and cloud computing sectors in the international market. China would also ensure that the Internet of Things (ioT), cloud computing and other information technologies were applied to everyday life, Li said.
These new drivers would play a bigger role in securing employment and increasing wages going forward, as well as helping the country maintain a medium-to-high growth rate and opening up new economic prospects, he added.
"The sharing economy gives everyone a fighting change to achieve their dreams," the Premier said.
Li's focus on innovation comes as Beijing move away from resource and investment-fueled growth to one led by consumption, tolerating dramatically slower gross domestic product (GDP) as a result.
In an attempt to address bubbling market concerns about a deep economic slowdown, Li reiterated that the economy remained stable.
"China will not head for a hard landing, we are capable of meeting primary targets for economic and social development this year," he told the gathering in Tianjin.
He pointed to steady rises in corporate profits within the industrial sector, service-sector expansion, stable consumer price inflation and narrowing declines in producer price inflation as justification for his faith in a soft landing for China's economy. He also noted the government's progress in job creation, noting that 5.7 million new jobs were created in urban sectors, marking 58 percent completion of Beijing's annual job-creation target.
Alluding to criticism that China was sitting on a bad-debt bubble, Li said that China's central government debt ratio was about 16 percent, better than its Western counterparts, and that Beijing would create conditions that would allow for lower corporate leverage ratios and financing costs.
Despite market speculation that the renminbi would depreciate further, Li repeated that the country's economic health did not warrant devaluation and said the currency would remain stable.
But Li was also quick to acknowledge the risks accompanying China's transformation.
"Difficulties can't be underestimated…We will implement proactive fiscal policy with greater efficiency, maintain prudent monetary policy and channel more resources to strengthen weak links," he said.
"Short-term fluctuations in growth are unavoidable, and there may be changes to traditional economic indicators but we should understand that the changes brought on by development of the new economy aren't fully visible yet."
He said Beijing would continue pressing ahead with structural reforms, including streamlining state-owned enterprises (SOEs), tackling overcapacity, proving greater market access to the private sector, ensuring workers were skilled for further employment and opening up the country's services and manufacturing sectors.
"We will make more a more fair and equitable environment for investment from outside companies," Li said.
Commenting on the implications of Britain's milestone Thursday referendum, in which the U.K. voted to leave the European Union, Li said the Brexit added a new layer of uncertainty to the global economy at a time when its recovery was only tepid.
Still, he said, China remained committed to growing ties with the U.K., as well as the EU, in the future.
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