Premier Li vows to remake economy

Targeted policies to continue despite fluctuations

China has vigorously pushed reform and economic restructuring despite pressures on its economy, Premier Li Keqiang said at Davos forum in Tianjin on Wednesday, pledging continued efforts to remake the economy.

Instead of resorting to strong stimulus or easing credit, the government is proceeding with reforms, having taken new steps toward reform that have resulted in a rising number of jobs, Li said while delivering a keynote speech at the opening ceremony of the World Economic Forum (WEF)'s eighth Annual Meeting of the New Champions, also known as the Summer Davos Forum, in North China's port city of Tianjin.

Fluctuations seen in some economic indicators for July and August following a flurry of targeted measures have stirred concerns over the durability of the economic recovery, with some market watchers calling for universal policy changes to revitalize the economy.

The premier, however, dismissed such possibilities in remarks on two consecutive days.

Speaking to entrepreneurs in Tianjin on Tuesday, he stressed that the country will continue its prudent monetary policy and targeted economic policies regardless of any data fluctuations.

The performance of the economy, as measured by employment, still saw signs of stabilization.

Between January and August, the unemployment rate held steady at around 5 percent across 31 major cities, during which time more than 9.7 million urban jobs were created, a jump of more than 100,000 over the previous year, Li said Wednesday.

"We believe the actual economic growth rate remains within the proper parameters, even if it turns out to be slightly higher or lower than the 7.5 percent target."

Over the four months ahead, continued efforts are expected to stabilize growth while pushing forward with broad-based reforms, said the premier, who has also vowed to step up scientific and technological innovation to help boost sophistication and creativity within the economy.

As the economic aggregate continues to expand, Li said, growth will mean more jobs and there will be a greater tolerance of fluctuations.

Klaus Schwab, executive chairman of the WEF, also gave a speech at the opening ceremony, saying the record number of attendees drawn by this year's Summer Davos showed rising confidence in the Chinese market among business executives across the world.

The premier's remarks on fostering quality growth were decidedly thought-provoking, James Z. Li, a forum participant, told reporters immediately after the conclusion of the opening ceremony.

On top of that, the premier's focus on technological innovation is of particular importance for Chinese companies seeking opportunities both at home and abroad, said Li, chairman and CEO of E. J. McKay & Co, Inc, an independent investment banking firm in Shanghai.

Commenting that the premier's speech is inspiring, Rodrigo Pérez-Alonso, director of Planning and Evaluation at Telecomunicaciones de Mexico, told the Global Times on Wednesday that Mexican companies will explore investment opportunities in the Chinese market in fields such as energy, lured by the long-term prospects for China's economy.

Speaking at a session during the Summer Davos on Wednesday, Li Daokui, director of the Schwarzman Scholars Program at Tsinghua University, also said the property market and the export sector, the two growth engines of the Chinese economy, are set to gradually fade away with new drivers that include private consumption and a shift to a greener economy taking over as the major powerhouses in the future.

Such a transition needs to be coupled with fundamental institutional reforms, said Li, also a former adviser to the People's Bank of China, the country's central bank.

Still some economists pointed out near-term risks, focusing particularly on the need for proper management of the real estate sector to ensure the stability of the overall economy.

While the monetary policy has stayed largely unchanged, eased controls on the real estate sector should be considered to prevent a systemic collapse, Xu Hongcai, director of the Department of Information under the China Center for International Economic Exchanges (CCIEE), a Beijing-based think tank, told the Global Times on Wednesday.

In addition, local governments suffering amid a faltering economic recovery who have seen their misery compounded by a widespread correction in the property market need to be given enhanced fundraising capabilities, Xu said, cautioning against any shock therapy in pushing reforms.