Chinese Premier Li Keqiang said his country is confronted by “huge challenges” as it opens up the economy and that the new government’s reform measures will be accompanied by tapered-off levels of growth.
Speaking in Berlin during his first trip abroad as premier, Li said the Chinese government will move forward with market-oriented reforms to generate stable growth after the economy unexpectedly slowed in the first quarter.
“As the size of the Chinese economy expands, China’s economic development is entering a range of reasonable growth,” Li told a Germany-China business forum today. He called China’s 7.7 per cent first-quarter expansion “within the reasonable expectations of our macroeconomic controls.”
Li visited Germany seeking to ease trade tensions with Europe and establish stronger links as his government signals a readiness to tolerate slower expansion to avoid environmental degradation. The new premier said open markets require China to engage more with other nations, pledging to grant foreign investors equal treatment and protect intellectual property.
The “ambitious” overhaul packages of his government, which took office in March, will offer “enormous” opportunities for the rest of the world, Li said. He outlined reforms tackling the areas of industrialisation, urbanisation, technological advances and agriculture.
China’s most recent quarterly expansion still remained above the government’s full-year target of 7.5 per cent.
Forecasts missed
Data earlier this month on fixed-asset investment and factory production missed forecasts and gauges of manufacturing and service industries declined. The economy expanded 7.8 per cent in 2012, the slowest pace in 13 years.
Chinese President Xi Jinping told a study session of the Communist Party’s top leadership on May 24 that the country won’t sacrifice the environment to ensure short-term growth.
Li, who chairs China’s State Council, has approved an initial set of reforms as the government lays the groundwork to scale back the state’s role, open industry and revamp household registration that’s hampering urbanisation.
Li spent yesterday and today in talks with German Chancellor Angela Merkel’s government, primarily tackling trade issues. Merkel will seek to resolve an EU trade dispute with China over complaints that the Chinese solar industry is flooding the global market with cheap products.
The Chinese premier repeated his rejection of “abusing” punitive trade sanctions, saying that they would harm business for China as well as Europe.
