Wen's speech at Summer Davos 2012 (full text)

Chinese Premier Wen Jiabao on Tuesday delivered a speech at the opening ceremony of the sixth Annual Meeting of the New Champions, also known as the Summer Davos.

The following is the full text of Wen's speech:

Towards a Brighter Future of the Chinese Economy

Speech by H.E. Wen Jiabao

Premier of the State Council of the People's Republic of China

At the World Economic Forum

Annual Meeting of the New Champions 2012

Tianjin, 11 September 2012

Professor Klaus Schwab, Executive Chairman of the World Economic Forum,

Ladies and Gentlemen,

I am delighted to meet you, friends old and new here today. Let me first express warm congratulations on the opening of the sixth Annual Meeting of the New Champions, or the Summer Davos, and extend a sincere welcome to all the distinguished guests present.

The Summer Davos Forum, inaugurated in China in 2007, has become a global forum with extensive influence. The theme of the forum for this year - "Creating the Future Economy" is highly relevant and practical. It reflects your vision on sustainable development and meets the high expectation for a bright future of the world economy.

China has enjoyed fast economic development for over 30 years. During the past decade in particular, we firmly seized the strategic opportunities for development, made hard and pioneering efforts, and scored new historic achievements in economic and social development. From 2002 to 2011, China's GDP grew at an average annual rate of 10.7%, and moved up from the sixth to the second place in the world. Our per capita GDP rose from 1,000-plus U.S. dollars to 5,432 U.S. dollars. China's foreign trade volume also climbed from the sixth to the second place in the world, and foreign exchange reserves exceeded three trillion U.S. dollars. China's industrial structure was upgraded, its agricultural foundation was consolidated, and regional development became much more balanced. All-round progress was made in social programs and people's livelihood significantly improved. We have withstood the test of many disasters, difficulties and risks. In the recent five years in particular, we effectively tackled the huge impact of the international financial crisis and sustained steady and fast economic growth. We owe these achievements to the strength of reform and opening-up, the persevering spirit of the Chinese nation and our tireless efforts in exploring a path of scientific development and harmonious society. Here I wish to share with you what we did and what we have learned in this course of our endeavors.

- We enhanced macro-regulation to promote steady and fast economic growth. Fast growth and low fluctuation was the most salient feature China's economic performance in the past decade. We gave full play to the basic role of the market in resource allocation, exercised macro-regulation in a scientific way, acted quickly to correct market failures and prevented major fluctuations in the economy. After the international financial crisis broke out, we fully implemented a package plan, making parallel efforts in expanding domestic demand and stabilizing external demand, increasing investment and stimulating consumption, reinvigorating industries and promoting technological innovation, boosting economic growth and improving people's livelihood, and overcoming current difficulties and pursuing long-term development. Thanks to these efforts, China was among the first to achieve an economic upturn and what we did was also vital in promoting world economic recovery. Some people made accusations about China's package plan in disregard of facts and they even said that we paid an undue price in this process. I want to make it clear here that it was exactly due to our resolute decision and scientific response that China was able to avoid factory closures, job losses and return of migrant workers to their home villages. These stimulus measures helped us keep the good momentum of economic development, maintain social stability and harmony and protect China's modernization process from major setbacks. Over the past several years, social wealth has increased, asset quality has improved and our capacity to resist risks has enhanced. From 2009 to the end of 2011, we began construction of 21 million units of low-income urban housing, among which 11 million units have been basically completed. The operational mileage of railways increased by 13,500 kilometers. The mileage of highways was extended by 376,000 kilometers, including the 24,600 kilometers of expressways. Infrastructural facilities such as urban rail transport and rural power grid were significantly improved. Over 7,000 large- and medium-sized and key small aging reservoirs were reinforced. We extended access to potable water to many more rural people. A large number of community facilities providing medical, health, education and cultural services were established. A new Wenchuan was built and all-round progress was made in economic and social development of the disaster-stricken areas. Meanwhile, we had fiscal and financial risks under control. Our budget deficit and outstanding government debt in 2011 were 1.8% and 15.28% of the GDP, both lower than their 2002 levels of 2.57% and 16.07%. The ratio of non-performing loans in the banking sector went down from 15.2% at the end of 2003 to 1.8% in 2011. We obtained a true picture of local government debts. The scale of local government debts in the past two years was on the whole stable and risks were basically under control.

- We improved the economic structure to raise the quality and efficiency of economic development. A shift from fast growth to sound growth was a fundamental change in the priorities of China's development in the past decade. We took strategic adjustment of the economic structure as the main task of shifting the growth model, and raised the quality, expanded the scope and bolstered the momentum of development. To balance the development of domestic and external demand, we rolled out a number of policies and measures to boost domestic demand. As a result, our current account surplus as a percentage of GDP came down to 2.8%, the contribution of final consumption to economic growth rose from 43.9% to 50.8%, and a pattern in which economic growth is jointly driven by consumption, investment and export is taking shape. Guided by an innovation-oriented approach, we formulated and implemented the mid- and long-term programs for science and technology, education and human resources development. National R&D spending as a percentage of GDP rose from 1.23% to 1.83%, the number of granted patents increased by 18.2 times, and enterprises have become the backbone of investment and R&D activities. We pursued economic growth by relying on the coordinated development of primary, secondary and tertiary industries. Overall agricultural productivity was enhanced, grain output grew for eight consecutive years, and grain reserves reached a historic high of over 250 million tons. The manufacturing sector became the largest in the world. High-tech manufacturing expanded at an average rate of 22% annually and became a leading pillar industry in the economy. Value-added of the service sector as a share of GDP increased by 1.6 percentage points and modern service industries such as finance, insurance, logistics, software and information enjoyed fast development. We promoted parallel development of industrialization, urbanization and agricultural modernization,implemented the overall strategies for development of different regions and achieved initial success in closing the widening gaps between industry and agriculture, urban and rural areas, and among different regions. The urbanization rate rose from 39.1% to 51.3%, bringing a historic change in China's urban-rural structure. Since 2008, the central, western and northeastern regions have been growing faster than the eastern region and the share of GOP of these regions in the national total has notably risen. A regional development pattern featuring sound interaction among regions and distinctive local features is coming into being.