China's Premier Li speaks on the economy

BEIJING (Reuters) - Below are comments from Chinese Premier Li Keqiang on China's economy made in a speech at the annual Boao forum in southern China's Hainan on Thursday.

"We will not take, in response to momentary fluctuations in economic growth, short-term and forceful stimulus measures. We will instead focus more on healthy development in the medium to long term."

"We have set our annual economic growth target at about 7.5 percent. As it is an approximate figure, it means there will be fluctuations. It does not matter that economic growth is a little bit higher than 7.5 percent or a little bit lower, as long as we can ensure relatively sufficient employment and do not have relatively big fluctuations, then economic growth will still be in reasonable range."

"Currently, China's urban employment situation is continuing to improve while the income of residents, firms' profits and fiscal income have kept steady growth, consumer prices are stable and the growth of power consumption has increased. There are positive changes in (economic) structural adjustment as well. (These all mean) China's economy has been stable and generally good at the beginning of this year."

"But we still need to see that the basis for the economy to improve is not yet stable and the economy still faces downward pressures. We should not underestimate difficulties. These problems are not only the results of a complicated international environment but also are reflections of deep-seated problems in the domestic economy and a shifting period of economic growth rates."

"Macro-economic controls will keep the overall balance and focus more on structural optimisation. We will control the strength of such policies reasonably to accord with changes in the overall economic situation and take targeted and differentiated measures at appropriate times."

"We are capable of keeping and have the confidence to keep economic growth in a reasonable range."

"The measures that we have already rolled out, and others to be unveiled to push forward reform, structural adjustment and benefit the public, will continue to steady economic growth."

"The fundamentals are there for keeping China's economic growth stable. We not only have good conditions for keeping economic growth at medium and high levels from now on, but also have any number of engines to keep sustainable economic development."

"We will copy and expand to more areas the pilot scheme of the Shanghai free trade zone."

"We will actively create conditions to establish a transaction interconnection mechanism for the Shanghai and Hong Kong stock exchanges, to push forward the two-way opening of capital markets in mainland China and Hong Kong."

"We will expand the pilot scheme of value-added tax reform to more services industries, including postal and telecommunications industries."

"We will push forward the construction of traffic infrastructure, including railways and roads in the central and western areas."

"We will further cut some taxes for the self-employed."

"We will take comprehensive measures to encourage consumption, to lower costs of distribution and let consumption play a better role in supporting economic development.

(China economics team)