China can control risks, hit 2017 growth target

Andrew Cummings
June 28, 2017

Premier Li Keqiang said China remains on track to meet its main economic goals for this year while warning of rising geopolitical risk and threats to the global upswing.

China has relied on infusions of credit to prop up economic growth since 2008, causing total nongovernment debt to rise from the equivalent of 170 percent of annual economic output in 2007 to an estimated 260 percent previous year.

"China will further expand market access in the service and manufacturing sectors, relax restrictions on foreign ownership, and treat domestic and foreign companies on an equal basis", Li said, addressing the opening ceremony of the Annual Meeting of the New Champions 2017, also known as Summer Davos, in Dalian.

"China has refrained from massive stimulus", Li said, adding that the Chinese economy was relying less on exports and investments and more on consumption.

Premier Li called on countries around the world to safeguard economic globalization to achieve inclusive growth.

Among those risks is high levels of debt, which recently prompted Moody's to cut its sovereign credit rating on China.

With executives of foreign companies such as International Business Machines Corp. and McKinsey & the audience, Li addressed the concern that stricter capital controls the nation implemented to keep its currency steady will restrict companies to move their profits out of the border.

Li said China is "fully capable" of hitting its economic development targets.

He said China has achieved better-than-expected results in its efforts to drive mass entrepreneurship and innovation, adding that the number of market entities of all sizes and types in China increased by a daily average of 40,000 in the past three years.

Bilateral ties between the two countries would be strengthened with the conclusion of the China-Singapore Free Trade Agreement upgrade and the Regional Comprehensive Economic Partnership, which would demonstrate the countries' joint commitment to globalisation, said the Singapore Prime Minister's Office in a statement.

Employment has remained stable, Li said, with the survey-based jobless rate at around 4.9 percent in May - the lowest in many years.

Li Daokui, a former adviser to China's central bank, said on a panel discussion that yuan depreciation pressure will remain moderate in the next few years as long as there's no major upheaval caused by the Trump administration. "All companies registered in China will be eligible to enjoy the same supportive policies that China offers in accordance with World Trade Organization rules to push forward the "Made in China 2025" strategy and promote technological innovation", he said.

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