Full Text: Li Keqiang's speech at the opening plenary of Boao Forum for Asia Annual Conference 2016 (3)

dies and Gentlemen,

China's development is closely linked with that of Asia, and I know that many friends are interested in the economic situation in China. So I wish to take this opportunity to say something about how we should look at the Chinese economy and what we intend to do in China to ensure continued growth.

First, how should we look at the Chinese economy? China's total GDP last year was RMB67.7 trillion yuan, or over US$10 trillion. Every move of this economy attracts world attention. Meanwhile, China is in the process of structural readjustment, and there is divergence among different regions and sectors. This is like what a Chinese poem says, one gets different impressions of a mountain when viewing it from the front, sideways, at a close range or from afar. Given the sluggish growth of the world economy, the lowest ever in six years, and with the Chinese economy undergoing transformation and upgrading, it is simply natural that different people may see the Chinese economy differently.

In my view, when we look at the Chinese economy, we should first of all look at its overall performance. Last year, China grew by 6.9%, a bit slower than in the past, but still one of the fastest among the major economies. It was achieved on the basis of the huge size of the economy which was in the process of transformation. Since the beginning of this year, the Chinese economy has on the whole enjoyed steady performance and seen new, positive changes. The number of measures we introduced to promote steady growth, restructuring and reform are being paid off.

Second, we need to look at the overall trend of the economy. According to the National Bureau of Statistics, over 13 million new jobs were created in China's urban areas last year, and the growth of people's income was faster than that of the GDP. The employment situation in the first two months of the year has stayed basically stable, with surveyed unemployment rate standing at around 5.1% in 31 major cities, roughly the same as last year. As industrial upgrading picked up speed, the service sector, high-tech industries and equipment manufacturing industries all maintained fast growth. Domestic demand continued to rise, and consumption growth stayed at double digit. Consumption and services have now become the main drivers of growth. Both energy intensity and the discharge of main pollutants went down, an indication that the quality of growth is getting better.

Third, we need to look at the prospect of the economy for the long run. China has become the world's second largest economy, but its per capita GDP is still at the middle level in the world. There is both a gap to fill and a potential to tap, especially in China's central and western regions, where we see huge space and room for development. China is now in the process of industrialization and urbanization. There is strong impetus for reform and much space for expanding domestic demand. Development is resilient, and the tools are many to boost innovation. The fundamentals of the Chinese economy have stayed unchanged and will remain sound in the long run.

Of course, we are fully aware that the Chinese economy is now deeply integrated with the world economy. Some international agencies have lowered the growth forecast for this year and destabilizing factors and uncertainties are on the rise. The impact will be felt in the Chinese economy. At the same time, in China, the deep-seated structural problems have become more prominent, and the economy still faces growing downward pressure. As the economy goes through transformation and upgrading, temporary problems have occurred, and companies in certain industries are facing a hard time with their operation. We will not dodge these problems. In fact, knowing where problems are have made us all the more confident. We will expand aggregate demand as appropriate, and at the same time press ahead with structural reform, supply-side structural reform in particular. On the whole, for the Chinese economy, we believe there are more hopes than difficulties.

Next, what do we intend to do to ensure continued growth? The Government Work Report adopted by the NPC has laid that out in great detail. Yesterday evening, we took the bullet train to travel from Sanya to Boao. A bullet train is powered not just by its locomotive, but also the facilities installed in between carriages. If we are to compare the Chinese economy to a bullet train, what we need to do is to keep it steady and move at a reasonable speed. With growing environmental and resources constraints, high-speed is not economical; nor is it environment friendly or sustainable. Our goal is to maintain medium-high speed of growth. China's development will be guided by the new vision of innovative, coordinated, green, open and shared development. We will continue to give priority to development, and work to build dynamic engines to propel the economy, making sure that it maintains medium-high speed growth and moves towards the medium-to-high end of development. (mo