Li Urges Greater Gov't Effort to Advance Reforms

The government will make greater efforts to advance reforms, which will play a key role in consolidating the recent upward trend in the Chinese economy, Premier Li Keqiang said on Friday.

"We should be aware that the foundation of the current economic recovery is not yet solid. ... There are still many risks and challenges," said the premier, who was presiding over an executive meeting of the State Council, China's Cabinet.

Li made the remarks as data from the National Bureau of Statistics showed the world's second-largest economy was expanding at 7.8 percent year-on-year in the third quarter, accelerating from the second quarter's 7.5 percent.

NBS spokesman Sheng Laiyun summed up the economic situation as "stable with major indicators staying within the rational range" and predicted the trend will continue in the following period.

"We have the full conditions and capability to realize the annual growth target (7.5 percent), but we should also make more efforts to continue with current reforms," Li said.

China has been following an overall stable monetary and fiscal policy so far this year, even in the face of a complex global climate and downward pressure on the economy. Instead, the government has been promoting reforms such as measures to streamline administrative procedures, facilitate investment and trade, and market-led interest rate reform.

Li urged the relevant departments and regions to make sure such reforms are fulfilled so as to build a solid foundation for future development.

Wang Tao, chief China economist at UBS AG, expected that comprehensive reforms would be mapped out during the Third Plenary Session of the 18th Communist Party of China Central Committee, which is due in November.

She said the reforms would include opening the service sector more to private and foreign investors, expanding the coverage of the pension fund and medical insurance, and breakthrough reforms in the financial sector and hukou (the household registration system), which will give the economy a boost in the near term.

"The latest economic data allows the government to maintain its current macroeconomic policies and pay more attention to forthcoming reforms," Wang said, adding that the government will be tolerant on credit growth and may not issue new regulations on the property market.

In the meantime, Wang also warned that higher leverage in the financial sector and the impulsiveness of local governments on urbanization will add risk to the economy.

"In the short and medium term, China will be ready to sacrifice some economic growth for reforms and economic structural transformation," Liu Yuanchun, assistant dean at the Renmin University of China School of Economics, was quoted by Xinhua News Agency as saying.