China Vice Premier Voices Confidence In Economy

by on April 2, 2012 5:25 am BST

— Chinese Vice Premier Li Keqiang says China has ability to maintain stable, relatively fast economic growth over the long run

— Li says China will continue to boost consumption and promote trade balance

— Li pledges to give level playing field for foreign investors

BOAO, China — Chinese Vice Premier Li Keqiang said Monday that the country has the ability to maintain solid growth over the long run, in a bid to boost confidence in the world’s second-largest economy which is facing a slowdown.

“China’s economic fundamentals are good. It has the ability to maintain stable and relative fast growth over the long run,” Li said in a speech at the opening ceremony of the Boao Forum, an annual gathering of government and business leaders on the southern Chinese island of Hainan.

Li Keqiang, who is expected to be named premier next year, also said China will continue to boost domestic consumption, promote trade as part of efforts to restructure its economy, and pledged to provide a level playing field for foreign investors.

Li’s comments come at a time when concerns are mounting over the sustainability of Chinese growth amid a global slowdown. Recent data showed that China is still struggling with the twin burdens of global sluggishness and a weak domestic property sector.

The HSBC Purchasing Managers Index released Sunday showed that China’s manufacturing activity contracted in March, while China reported a trade deficit of $31.5 billion in February, its largest on record.

Premier Wen Jiabao said last month the government had scaled its economic growth target back to 7.5% this year, down from the 8% that Beijing had set as a minimum growth target in eight years.

Li said that China will accelerate the shift of its economic base away from exports and investment, and move its focus to consumption.

“Boosting domestic demand is the top priority when we are trying to re-balance the economy, and China’s urbanization will provide the greatest potential for boosting domestic demand,” he said.

China would continue to deepen reforms of financial and capital markets, making them more market-oriented, Li said. The country would also increase imports and strengthen the protection of intellectual property.

“China will treat domestic and foreign companies equally as it seeks to become a transparent and fair market,” he added.

Former U.S. Treasury Secretary Henry Paulson on Monday also urged China to further develop its capital markets and open them to foreign competition to help the Chinese yuan become a market-determined currency.

“Capital market development is essential to the re-balancing [of China’s economy] and essential to the prosperity [of China],” he said on the sidelines of the Boao Forum.

-Rose Yu and Yajun Zhang contributed to this article, Dow Jones Newswires; 8621 6120-1200; rose.yu@dowjones.com


(END) Dow Jones Newswires

April 02, 2012 01:25 ET (05:25 GMT)