China's Li promises reform as growth slows

Premier's bid to reassure local workers and global markets come amid growing labour protests in country's northeast.

    China's premier has promised more market-opening reforms and said China can keep slowing growth on track.

    The remarks are seen as aimed at reassuring local labourers and global markets about the outlook for the world's second largest economy.

    Speaking at a news conference on Wednesday, Li Keqiang promised to shrink steel and coal industries, make the financial system more market-oriented and reduce the government's role in business.

    He expressed confidence that despite such painful changes, China's economy can achieve its official growth target of 6.5 to seven percent and avoid mass job losses.

    "So long as we stay on the course of reform and opening up, China's economy will not suffer a 'hard landing'," Li said at the event capping the annual meeting of China's ceremonial legislature.

    Li's statement comes amid brewing labour protests in the country's northeast.

    On Tuesday, the government promised coal mine workers two months worth of salary if they called off the demonstration.

    The speedy end to the protest in the city of Shuangyashan underscored the government's sensitivity to labour unrest, as it embarks on plans to restructure state-owned industries that involve laying off five to six million workers.

    Major declarations

    Chinese leaders have spent the past three weeks making major declarations about economic stability following stock and currency turmoil that dented their reputation for adeptly managing growth.

    In Wednesday's wide-ranging televised event lasting nearly two hours, Li also said US-Chinese cooperation will grow regardless of who wins this year's US presidential election.

    Asked about tensions over conflicting claims to portions of the South China Sea by Beijing and other governments, Li said China wants "harmonious coexistence" with its neighbours.

    Inside Story - What's in store for China’s slowing economy?

    The repeated Chinese reassurances have started to quell anxiety, but the country has some way to go to calm global markets, private sector analysts said.

    At a February meeting of global finance officials in Shanghai, both Jacob Lew, US treasury secretary, and Christine Lagarde, managing director of the International Monetary Fund, said the reflexively secretive communist government needed to do a better job of explaining policy changes.

    China's ruling Communist Party is navigating a years' long shift from a worn-out growth model based on exports and investment, to a more sustainable approach driven by domestic consumption.

    An unexpectedly sharp downturn over the past two years has raised the threat of politically dangerous job losses.

    The economy suffers from "government overreach", Li said, referring to complaints over the dominance of state companies in areas from energy to finance to telecoms.

    He said China is failing to do "an adequate job of ensuring a level playing field" for entrepreneurs who generate most of China's new wealth and jobs.

    SOURCE: Agencies


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