Measures prevented systemic financial risks: Premier Li

By Li Qiaoyi and Song Shengxia in Dalian Source:Global Times Published: 2015-9-10 0:48:01

China the origin of world growth, not economic woes: Li

China has warded off systemic financial risks following measures to stabilize the stock markets, Chinese Premier Li Keqiang said Wednesday, reassuring markets of a bright future for the world's second-largest economy despite recent results.

The measures are aimed at preventing risks of contagion as China's stock markets experienced abnormal fluctuations particularly in June and July, Li said, adding that such efforts are consistent with the prevailing international practices.

He explained that the nation will continue pushing for the development of a multi-layered capital market which is open and transparent to guarantee long-term stability.

The premier made the remarks at a meeting with company executives during the Annual Meeting of the New Champions 2015, also dubbed "Summer Davos," in Dalian, Northeast China's Liaoning Province. He will deliver a keynote speech at the opening ceremony of the annual event on Thursday.

In a sign of renewed investor confidence, the Shanghai Composite Index gained 2.29 percent to stay well above 3,200 points on Wednesday.

Confidence in the mainland stock markets also affected global equity markets, with Japan's Nikkei index closing nearly 8 percent higher on Wednesday, its biggest single-day rise since 2008.

"The Chinese stock markets are relatively new, operating for about 20 years. There is much room for improvement. We need to strengthen government regulation, and also draw lessons from international ones," Zhang Xiaoqiang, executive vice chairman of the China Center for International Economic Exchange and former vice director of the National Development and Reform Commission, told a panel discussion at the forum on Wednesday.

Wild swings in the stock markets, coupled with the recent devaluation of the yuan as the central bank adjusted the way it sets the yuan's daily fixing rate, as well as soft economic indicators, have added to market jitters.

Addressing the worries, Li described the economic situation as "fluctuating as it seems, yet promising as it's envisioned," citing first-half economic growth of 7 percent that still puts China's growth rate among the fastest in the world.

The nation's urban unemployment rate stood at 5.1 percent, and new urban jobs of more than 7 million in the first half of the year also proves that China's economy operates within a reasonable range, the premier added.

He likewise said that there's no need to continuously devalue the yuan, as this runs counter to the yuan's global value.

China does not wish to see a global currency war, he stressed. "China is hardly the source of world economic risks, but rather the origin of world economic growth."

"Signs of economic stabilization will emerge in the second half of the year and first quarter of next year, because fixed-assets investments are recovering, especially property investments, which have grown 4 and 5 percent, respectively, compared to the same period last year, and have reached rock bottom," Li Daokui, an economist at Tsinghua University, told the Global Times on the sidelines of the forum.

Still, some of those at the forum expressed concern over problems confronting the economy.

"China faces a very challenging path trying to transform from an investment-driven to a consumption-driven economy without slowing growth," Zhang Yichen, chairman and CEO of CITIC Capital Hong Kong, said at the forum.

Li, the former central bank governor, also said that China's economy doesn't need aggressive stimulus "but needs 'acupuncture' to calm the key nerve point of the economy."

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