Premier Li Keqiang arrives for the news conference after the closing meeting of the fourth session of China's 12th National People's Congress at the Great Hall of the People in Beijing, March 16, 2016. (Photo by Xu Jingxing/chinadaily.com.cn)
New Economy
Caijing: In this year's Government Work Report, the concept of the new economy was put forward for the first time. I wonder if this concept refers to e-commerce and those micro and small businesses? What does it have to do with the campaign for mass entrepreneurship and innovation? And how helpful could it be for withstanding the downward economic pressure?
Li Keqiang:
To develop the new economy will help us foster new economic drivers and move forward China's economic transformation. The concept of the new economy covers a wide range of areas and has many dimensions. It can be found in the primary, secondary and tertiary industries. It's not just about emerging forms of business and industries such as e-commerce, cloud computing, the Internet of things and Internet. It can also be found in smart manufacturing, large-scale customer-made production in the industrial sector. It's also about the appropriately scaled-up operations in the primary industry, that is agriculture such as family farms and shareholding cooperatives.
We believe that micro and small businesses can do a lot in developing new economy and also large companies can make a big difference. The truth is many large companies in China have established their own makers' spaces. There are many such examples.
When development has come to a certain stage, it is only natural for traditional growth drivers to begin to wane, and that has happened in many developed countries. Hence, we need the boom of new growth drivers to accommodate the need of industrial revolution. And when we combine the new growth drivers and the upgraded traditional growth drivers, we can bring into being a hybrid driving force.
New growth drivers will also help with our efforts to cut industrial overcapacity. In the companies of those sectors with overcapacity, there is a problem of overstaffing, and the growth of new drivers will help generate new jobs to re-employ any possible laid-off people. The campaign of mass entrepreneurship and innovation is to put in place a platform for the development of various types of companies and research institutions, and to create a broad space for crowdfunding, crowd innovation and crowdsourcing.
When we bring into full play the enthusiasm and creativity of all our people, it will generate a powerful momentum. With that momentum and our firm determination, we will be able to withstand the downward economic pressure and achieve faster economic transformation. Ultimately, a country's prosperity and development would not be possible without the full involvement of all its people and that will also be a process for us to boost the all-round human development.
China-Russia relations
Russia Today: Both China and Russia have recognized that the business cooperation between the two countries is lacking behind the growth of their political ties, and both sides have promised to change the situation by promoting trade ties and also investment cooperation. However, we have not seen a large inflow of Chinese investment in Russia yet. What is the reason for that? Is it because of the Western sanctions against Russia or Russia's own economic situation? Are Chinese companies under pressure from the United States and other countries in cooperating with Russia. Moreover, some Chinese experts believe that China is not that interested in making investment in Russia, but only interested in getting Russia's cheap energy. What is your response?
Li Keqiang: China and Russia are each other's biggest neighbors, there is a comprehensive strategic partnership of coordination between the two countries. This relationship is an all-dimensional one. President Xi Jinping and President Vladimir Putin have met with each other quite often, there is a close political relationship between the two countries and our business cooperation has been continuously rising because we have multiple operations in quite many fields. China has all along developed its relationship with Russia on the basis of mutual respect and mutual benefit, and China pursues an independent foreign policy of peace. China-Russia relations will not be affected by changing circumstances in the international environment, and will not cave to third-party pressure. In the meantime, China follows the principle of nonalignment, and China-Russian cooperation will not be targeted at any third party.
Just now I said our business cooperation has also been rising. For example, last year, Chinese imports of oil from Russia increased by eight million tons, but because of plummeting commodity prices on international markets, China's total imports and exports declined, not just its imports from Russia. The physical volume has gone up, by the total trade volume has come down because of the falling prices, and neither country is responsible for that. Last year I had a deep discussion about China-Russia business cooperation with Prime Minister Dmitry Medvedev, we agreed that we can explore cooperation in the integrated development of oil and natural gas, sectors that will help attract more Chinese investment, and we can also introduce a greater level of diversity into our trade mix. I hope that next year, if you come to this press conference again, I can tell you that the business ties between our two countries have turned the corner for the better.
And I believe the enhancement of our business ties will also reflect the improvement of the global trade situation, and that will be a warm breeze our two countries can bring to global trade.
China's economic growth and transition
Xinhua News Agency: Some people are worried that China's growth might fail to reach the target or even below 6.5 percent. What's your view?
Li Keqiang: You raised a big question. But it is impossible for me to agree that China cannot achieve the growth target this year. The weak world recovery has taken its toll on the Chinese economy, which is deeply engaged in the world economy. China's economic transition is under way and its deep-rooted problems are emerging. The downward pressure indeed is increasing. But one prominent feature is greater divergence among regions and industries.
The other day I read a foreign media report saying that one visit to a heavy industry left the impression of depression, while the next stop to a technology park left the impression that the economy is growing at a double-digit rate. This is in line with my last year's field trip conclusion: hope and challenges coexist. If we look at the "fundamental" and "big trend", hope outweighs challenges.
We are fully confident about China's long-term growth prospects. This confidence is not groundless, because we believe that there will not be a hard landing as long as we stick to the reform path. There is still huge potential for China's markets; the general public has unlimited creativity. The government has overreached its aims in many aspects of economy, which hindered the gains of productivity; we are also not doing a sufficient job in ensuring a level playing ground . I believe through reform we can stimulate more vitality in the market, and greater vigor of the people. The wisdom and hard work of our people, if well tapped, is enough to withstand downward pressures.
The deregulation and tax cuts of the past few years will unleash the vitality of the market. Meanwhile, new forces of economic growth drivers are taking shape in a way that beats expectations. Despite the slowdown over the past few years, the employment condition is not bad. Last year we created more than 13 million jobs in the urban area. In the first two months of this year, the service sector grew 8.1 percent. Among them, there is high-tech research development, which is giving a push to the upgrade of traditional industries, an area where there is so much work we can do. We are in the midst of pushing ahead with deindustrialization and urbanization. New-style urbanization is the large domestic demand, especially in central and western regions, where there is enormous room for effective investment. If we combine the "fostering of new drivers" and "upgrading of old engines" and make them the "double-engines" of the Chinese economy, it will go through the pass of difficulties and leap to the plateau of hope.
Under uncertain world economic prospects, instability is adding. But we have ample reserves of policy instruments. Last year, despite a six-year low in world growth, we managed to reach our previous target. We realized that in the absence of all-out stimulus measures, instead we have chosen the path of structural reform, which is tough but sustainable. There will be small and short-term volatility down the road, but in case there is any sign that the economy will slide beyond an appropriate range, we have the reserves of innovative macro-adjustment measures to stabilize expectations.
The "stress test" we have been through, in another way, is a precious experience. I believe that under the leadership of the CPC central committee with Xi Jinping as general secretary, as long as the new vision we have deployed unites the people's efforts, we will be able to deliver a good start to the 13th five-year plan, which will bring a warm breeze to the world.
