Wen's speech at Summer Davos 2012 (full text)(3)

As I look back at each and every step I took in the past ten years, strong emotions well up inside me. They are emotions of a deep love and strong confidence that I have always cherished towards my beloved country, an ancient civilization brimming with youthful energy. Through ten years of hard work, we have elevated our economic and social development to a new level and laid a more solid material, technological and institutional foundation for future development. In today's China, new growth areas keep emerging and strengthening. Science, technology and education are playing a bigger role in driving economic development. There are ample supply of social funds, a better educated labor force, improved infrastructural facilities and a sound institutional framework. There is booming businesses, improved macro-regulation by the government and a stable social and political environment. In particulars, we have established a path of scientific development. All these are important factors that will make a difference for a long time to come. China is still in an important period of strategic opportunities for development. The advance of industrialization, urbanization, information technology and agricultural modernization will continue to unleash huge development potential and the giant ship of the Chinese economy will sail ahead fast yet steadily and reach the shore or a brighter future.

Ladies and Gentlemen,

This year, international political and economic situation has remained complicated and fluid, and brought more difficulties to China's economic development. In line with the overall requirement of making progress while maintaining stability, we have strengthened and improved macro- regulation, followed a proactive fiscal policy and a prudent monetary policy, and made our policies more forward-looking, targeted and flexible. We have properly handled relations between maintaining steady and robust economic development, adjusting the economic structure and managing inflation expectations, laid greater emphasis on stabilizing growth, and sustained steady and fast economic growth. We have intensified anticipatory adjustments and fine-tuning to respond to the new developments and problems in the economy. In particular, we have taken a host of policy measures since May. They are mainly as follows: We stepped up structural tax cuts and advanced the VAT for business tax pilot program on a priority basis. We improved the plan of the reform and extended it to more places. We took a series of measures to ease the tax burden on small and micro businesses. We gave play to the role of monetary policy in making counter-cyclical adjustments, lowered the required reserve ratio, cut the benchmark deposit and lending rates twice, widened the floating range of interest rates, lending rates in particular, and maintained steady and moderate growth in money and credit supply. We allocated 26.8 billion yuan from the central budget to support enterprises in undertaking technological upgrading. We adopted 42 provisions of implementation for the Guidelines of the State Council on Encouraging and Guiding the Sound Development of Nongovernmental Investment (the "new 36 Guidelines"). We launched the program of promoting energy-efficient home appliances to the benefit of the people. We stepped up infrastructure development that concerns the people's well-being, moved faster in building low-income housing and renovating dilapidated rural houses, launched the projects of upgrading underground pipe networks and water supply and drainage facilities in some big cities, and improved the water conservancy facilities for farmland. We implemented and improved the policies and measures for stabilizing exports, pushed forward trade facilitation and actively expanded imports. We abolished and adjusted 314 administrative items that require government review and approval. All these measures have helped boost market confidence and promote steady economic growth. In the first half of this year, China's GDP grew by 7.8% year-on-year. Domestic demand remained a major force driving economic growth. The share of current account surplus of GDP dropped to 2.3%. Employment is stable. In the first seven months this year, 8.12 million new urban jobs were created, up by 5% year-on-year. The agricultural situation has further improved, evidenced by increase in summer grain output for nine consecutive years. The Consumer Price Index (CPI) in July rose 1.8% over the same period of last year and inflationary pressure has notably eased. Macroeconomic indicators show that China's economic and social development is in good shape. The speed of growth is still within the target range set at the start of the year, and although growth is showing down, it is being more stable. As the recent measures are implemented and take effect, we expect the economy to further stabilize. We will, in light of the trend of economic performance, fully utilize the ample fiscal and monetary policy space, fully tap the huge potential of domestic demand and fully motivate the various localities and departments. We will give greater priority to stabilizing growth, continue to follow a proactive fiscal policy and a prudent monetary policy, and maintain the continuity and stability of our policies. We will step up anticipatory adjustments and fine-tuning, press ahead with structural tax cuts and keep the increase of money and credit supply at a steady and moderate level. We will make stronger efforts to

spur consumer demand, expand effective investment with a focus on bringing out the energy of nongovernmental investment, stabilize external demand and bolster the real economy. We are fully confident that we have the conditions and ability to overcome the difficulties on our way ahead, maintain steady and robust economic growth and achieve development at a higher level and with better quality for a long time to come.