China will not let economy slide out of proper range: Li

By Cao Siqi, Chen Qingqing and Yang Sheng Source:Global Times Published: 2019/3/15 21:08:40

‘Implementation of the policies and supervision’ are key

Chinese Premier Li Keqiang speaks at a press conference after the closing of the second session of the 13th National People's Congress in the Great Hall of the People in Beijing on Friday. Photo: CNS

 Facing new downward pressures on economic growth, Chinese Premier Li Keqiang on Friday assured the public that the Chinese government is determined to implement large scale tax and fee cuts and live on a tight budget to let enterprises benefit. 

Analysts said the messages sent by the premier will help lift people's confidence, stimulate the domestic market and boost China's economy. 

Premier Li met the press at the Great Hall of the People after the conclusion of the second session of the 13th National People's Congress on Friday morning. He vowed to do as much as possible to address people's concerns regarding the elder, the cost of raising a child, unemployment and the country's healthcare system.

Li also promised that China will not allow major economic indicators to slide out of their proper range and no matter whatever new circumstances are encountered.

China will always take a long term view to maintain a stable economy and it will always be an important anchor for global economic growth.

Analysts noted that Chinese companies and people's confidence in the economy has increased.  

"The supply-side structural reform has significantly cut over-capacity and inventory. Seeing this from the perspective of its short-term and mid-term goals, I believe we have obtained great achievements," Cao Heping, a professor of economics at Peking University, told the Global Times. 

The government has laid the foundation for the shift of China's fiscal and monetary policies to pro-growth in the next five years, Cao said, adding that the combination of fiscal and monetary policies will probably yield results over the next three quarters. "I am very optimistic about China's economy."

However, experts pointed out that as the key policies on benefiting people and enterprises have been announced, implementation of the policies and strengthening public supervision need to be resolved.

Overcome challenges 

In response to worries about China's economic outlook, Li told reporters that the adjustment of this year's GDP growth target was made against the backdrop of a slowing global economy, as several international organizations have recently lowered their forecasts for global growth this year.

The 6-6.5 percent GDP growth target for 2019 is compatible with the GDP expansion of 6.6 percent achieved last year, and the new target has sent a message of stability to the market, he noted. 

Li said China has policy room reserved for dealing with possible uncertainties this year such as raising the deficit-to-GDP ratio, or using other instruments like required reserve ratios and interest rates.

Premier Li's comments mirror the major task of the Chinese government in 2019 which is to stabilize growth, with a priority on stabilizing employment, without using "flood-like" stimulus, Liu Xuezhi, an economist at Bank of Communications, told the Global Times. 

Counter-cyclical adjustments of macroeconomic policies will continue to take effect, and the policy trend will be more proactive than last year. It takes time for policy to be implemented and to see effective results, but it will result in a stabilized economy in the second half of 2019, Liu said. 

As a key countermeasure against downward economic pressure, Li said China will implement larger scale tax and fee cuts this year, which will deliver a dividend of nearly two trillion yuan (about $297 billion) to corporations. 

Amid questions on how the government will deal with the decline in fiscal revenue, Li said the government must tighten its belt, which means it will not only squeeze spending from the general public budget, but also will increase the profits turned over to the state coffer by financial institutions and state-owned enterprises. 

Li explained that the move will maintain fiscal sustainability as the large tax cuts provided to manufacturers are another way to breed fiscal revenue as benefits to enterprises will create more jobs and increase people's income. 

" We do this not to consume the future but rather nurture the future," Li said.

Li also pledged to further improve its business environment to unleash market vitality and creativity.

"To further improve the business environment, the government will continue to focus on streamlining administrative approvals and delegating power to lower levels, as well as improving regulations," Li said, 

China will continue to push forward the reform and opening-up toward greater depth and breadth, pursuing market-oriented and law-based reforms to ensure that concrete outcomes will be delivered through specific actions, he said. 

Zhang Weiwei, director of the China Institute at Fudan University, told the Global Times that the messages show that China will reinforce its image of opening-up despite the protectionism that is rising among some Western economies.

The US economy might face serious problems and international commodity prices might have great fluctuations this year, but China still has the confidence to overcome these challenges as its domestic market has great potential, Zhang noted.

Zhang said "although some Western governments are still conservative and resort to protectionism, foreign enterprises will receive the messages from China and will very likely make the wise choice to grasp the chance to further activate the potential of the Chinese market, and this will help China overcome its economic challenges as well."

To activate potential 

The Chinese government will also take measures to further boost domestic consumption and unleash market potential and the country will ensure the creation of more than 11 million new jobs this year. 

On improving livelihoods, Li said China will further ease the burden of patients with chronic or serious diseases this year. Half the cost of medicines for treating chronic diseases such as high blood pressure and diabetes will be reimbursed under the medical insurance scheme. The move will benefit some 400 million patients.

Meanwhile, China will provide better care for senior citizens and children, which has nearly 250 million senior citizens at the age of 60 or above and over 100 million children under the age of six. Services targeting these people are still in short supply, affecting many Chinese families.

Insufficient nurseries and kindergarten services are particularly prominent since the implementation of the two-child policy. To address such problems, Li said developing community-based child and elderly care services are good solutions.

A number of steps will be undertaken to implement the new policies. Information on how taxes are being reduced and who is benefiting should be transparent to the public, Zhu Lijia, a professor of public management at the Chinese Academy of Governance in Beijing, told the Global Times. 

"We should enhance public supervision of local governments, only in this way will the policies be down to earth," he said. 

Newspaper headline: China to keep proper economic growth range: Li

Posted in: POLITICS

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