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People's well-being will improve due to growing Chinese economy: Le Keqiang

China must take strong measures to cope with the current downward economic pressure, says Li Keqiang

Business Standard 

China's Premier Li Keqiang
China's Premier Li Keqiang

Reuters: Last year, took a number of measures to ease monetary conditions. also cut taxes and fees. This year is promising more monetary easing, more tax cuts and more infrastructure spending. Are China’s economic problems bigger than previously thought? And if the economic slowdown doesn’t stop, would China consider taking more aggressive measures such as lifting property curbs and cutting benchmark interest rates?

Li Keqiang: It is true that China’s economy has encountered new downward pressure against a larger backdrop of slower global economic growth. In the past month or so, several major organisations have adjusted downward their forecast for global growth this year. We have adjusted downward, as appropriate, our projected economic growth target for 2019, and set it at a target range. This is compatible with the GDP growth rate we achieved last year. It is also consistent with our determination to prevent major economic indicators from sliding out of the proper range. By this way, we have sent a message of stability to the market.

Against the backdrop of growing trade protectionism in the environment, China’s GDP aggregate reached 90 trillion RMB yuan. Our projected target for GDP growth this year is 6-6.5 per cent. It will be a growth on top of a very large base figure. Keeping steady growth of China’s economy in itself is important progress.

We must take strong measures to cope with the current downward economic pressure. One possible option is to resort to quantitative easing, including excessive money supply and a much higher deficit-to-GDP ratio, flooding the economy with liquidity. Such an indiscriminate and expedient approach might work in the short run, but may also lead to future problems. Hence, it is not a viable option. Our choice is to energize market players to counter the downward pressure.

China now has over 100 million market entities. When their vitality is fully unleashed, the energies that could be created would be incalculable. We must keep our policies stable and ensure their continuity. We will continue to cut taxes and fees, streamline administration, foster new drivers of growth, broaden market access and level the playing field for all market players. In this way, we will be able to lift the curbs on the market, free up space for companies and resolve concerns for our people. We will generate tremendous creativity in this process. And this will also put us in a strong position to keep major economic indicators within a proper range and achieve high-quality development.

We also need to take strong measures to cope with growing uncertainties that we face this year. We have policies in reserve for that purpose. For example, we raised the deficit ratio for this year by 0.2 percentage point to 2.8 percent, which is below the warning line of 3 percent. In addition, we can also resort to quantitative or pricing tools like required reserve ratios and interest rates. We are not going for monetary easing, but trying to provide effective support to the real economy. Facing new circumstances, we will stay firmly grounded in China’s realities and take a long-term view. We will do our best to keep China’s economic growth stable and maintain the sound momentum of the economic development for the long run. China’s economy will remain an anchor of stability for the global economy.

China News Service: The Chinese government has been taking measures to improve living standards over the years. However, there are still complaints about some issues concerning quality of life. Next year, we will complete the building of a moderately prosperous society in all respects. So, in addition to poverty alleviation, what concrete progress can we look forward to in all these livelihood areas and what plan does the government have to improve people’s well-being?

Li Keqiang: Any issue related to people’s lives is of paramount importance and there are still a lot of things in this respect the government must do. We will continue to improve people’s well-being in the process of developing the We must put our focus on these key areas and major difficulties faced by our people. A big data survey suggests that issues related to aged and child care are still commonly felt difficulties for our people and this must draw closer attention from the government.

The number of senior citizens at the age of 60 or above in China has reached 250 million, the number of those at or above 65, 170 million, and there are up to 100 million children in China below six years old. Services targeting these populations are still lacking, and they affect most of the Chinese families.

How does the government plan to address this acute problem? In my local inspection trips, I have seen that some good experience has been gained in this respect, that is, to vigorously develop community-based providers of such services. If there can be accessible, quality services that are safe, reliable, and beneficial to all, they will certainly be very popular among the targeted populations. In this respect, the government needs to develop innovative mechanisms to better match market supply with our people’s demand. The government also needs to provide policy support. For example, we may provide public rental housing units for free to private operators as venues of facilities for providing assisted meal, assisted mobility, day care, rehabilitation, and even open senior colleges. The government may also provide tax exemption or tax-free treatment for these service providers in terms of their expenses on water, electricity and natural gas. These entities are all working together with the government to address our people’s actual needs. The main job of community-level officials and competent departments is to ensure fair market access and enhance oversight so that these services will be both safe and reliable, and those who break the rules will be driven out of the market.

Edited excerpts from a press conference by after the meeting of the National People’s Congress, 15 March in Beijing

First Published: Sat, March 23 2019. 19:42 IST