Full Text: Premier Li Keqiang Meets the Press (3)

Straits Times: Premier Li, my question is about China's economy. China has set a lower GDP growth target this year of around 7%. Some say that it signals that Chinese economy has entered what they call a "new normal" of slower but better quality growth. What are the benefits knowing there are also downsides of slowing Chinese economy? Can you tell us how this new normal will affect China and the world? How should we view this and can we have the confidence that China is still committed to this new normal and can mange it well?

Li Keqiang: China's economic development has entered a new normal. This year we have set the GDP growth target at approximately 7%. The GDP growth target has been adjusted downward, but it will by no means be easy to meet this target. Because China's economic aggregate keeps expanding and now the size of the economy is valued about 10 trillion US dollars. So a seven percent increase in today's economy is equivalent to the economic aggregate of a medium-sized country. We want to upgrade China's economy to a medium-high level of development and pursue a growth with improved quality and performance. This will help maintain China's growth at a medium-high speed and lay a more solid foundation for us to achieve modernization. It will also be China's big contribution to global economic growth.

I sense some elements of concern in your question about China's economic growth and when the journalist from Bloomberg asked his questions, there was also such a worry about slowing growth in China. I have said on many occasions that under this new normal, we need to ensure that China's economy operates within a proper range. And if the growth speed comes close to the lower limit of the proper range and affects employment and increase of people's income, we will step up targeted macro economic regulation to boost the current market confidence while maintaining the continuity of our macro economic policies to anchor long-term market expectations. The good news is that in the past couple of years, we did not resort to massive stimulus measures for economic growth, and that has given us ample room to exercise macro economic regulation and we still have a host of policy instruments at our disposal.

The latter part of my remarks is about a hypothetical situation. At the same time, I recognize that there is considerable downward pressure on China's growth and we still face multiple risks. This requires that the government strike a proper balance between maintaining steady growth and making structural adjustments. In Weiqi, a chessboard game invented by the Chinese, one needs to both plan on the big side and get key moves right. When it comes to the economy, we must meet both ends of maintaining steady growth and making structural adjustments. And this way, we can get a handle on the big situation. This requires that we have vision, perseverance and courage. I have confidence that with joint efforts, we are able to maintain the long-term positive fundamentals of the overall Chinese economy.

China Business News: Mr. Premier, you have stressed the importance of mass entrepreneurship and innovation on many occasions, and see it as a new engine fueling China's economic growth. But some people say that it is a personal decision to start a business and it is a market behavior. So why should the government spend so much time and energy on this?

Li Keqiang: I appreciate your good intention of saving the government time and energy, but this is something the government must do. Mass entrepreneurship and innovation is in itself a reform endeavor. This reform is inspired by the experience we have drawn from the past. Over the past more than 30 years, it is the introduction of household contract responsibility system that has brought into full play the initiative of the vast number of Chinese farmers. It is because our people could move freely across provinces and cities that several hundred million farmers have migrated into cities to find jobs. This has created the miracle of China's economic development.

Last year when the government launched the reform of the business system to streamline its administration, I recall that I paid a visit to one of the local venues for business registration where I talked with a woman who has retired. As you may know, the government has replaced the paid-in capital registration requirement with subscribed capital registration. This has boosted our people's enthusiasm to start their own businesses. This woman is one of them. She told me that she wanted to register a wedding service company because she was well-versed in the local traditional wedding customs. She told me that some couples wanted to have a traditional wedding, so she believed that though she had not attended university, she had a competitive edge in providing such services. I also visited some ventures cafes and makerspaces where I see that the young people there all have brilliant ideas. When their ideas are put into practice and produce actual products, they are boosting market demand. I believe there are a large number of such people with outstanding talent in China. We must lift all the restrictions so that they can put their talent to best use.

To boost market vitality, the government must eliminate road blocks and pave the way for people to tap their entrepreneurship. The government plans to do more in this regard this year. Market access will be further relaxed. Business license and all the required certificates will be integrated into one. It would no longer take one so much trouble to register a business in some areas of the services sector. The government also needs to foster more favorable conditions for business start-up. There needs to be low-rent makerspaces to add wings to the entrepreneurship of our people. The government will also fully leverage the national guidance fund to encourage more seed capital to pitch in. Taxes and fees will be further reduced to ensure that all businesses get to forge ahead with a light pack.

A country could achieve prosperity when its people's initiative is brought into full play. There will be much economic vitality when there are ample business opportunities and choices for consumers. By encouraging mass entrepreneurship and innovation, we want to help more people become better off and enable more to achieve their full potential in life. This will also help us adjust the income distribution structure and promote social fairness. In particular, we want to ensure that young people, especially children from poor families, will have equal access to opportunities for upward mobility. (mo