China is on track to meet its economic targets for the year, despite fears of slowdown, the Chinese Premier Li Keqiang has said.
Speaking at the World Economic Forum in Dalian, China, Li said there was not a risk of a hard landing due to government actions, despite a series of poor economic data and volatile stock market performance in the past few weeks.
Li said: “China is not the origin of global economic risks. Instead, it is a driving force for global economic growth."
August inflation figures released today showed the producer price index falling 5.9 per cent, indicating spare capacity in the economy, while the consumer price index rose two per cent.
Yesterday China’s economic outlook was hit by falling imports and exports in August. Exports have been hit by weak global demand, while imports have been constrained by the slowdown in China’s domestic economy.
The data came after China revised its 2014 economic growth down from 7.4 per cent to 7.3 per cent, just weeks after lower-than-expected manufacturing figures sparked market turmoil around the world, including in China.
China has already cut interest rates five times in less than 12 months to stabilise the economy, but Li said that in the first half of this year, its economy grew 7.4 per cent, with inflation at 2.3 per cent. “While we have seen growing downward pressure on the economy, more jobs have been created thanks to reforms that have been taken.”
Speaking on financial reforms, he added:
We will adhere to the principles of giving market forces and the rule of law a major role in the reform process and strive to cultivate a transparent and stable capital market with long-term healthy growth.
We’ll lower the threshold for private investors to set up banks, and gradually allow more foreign investment into the sector. We’ll also encourage stronger cooperation between foreign players and domestic partners.
Those policies are set to be published. Generally speaking, reform is an irreversible trend and the efforts to reform won’t stop. Of course, we’ll take a step-by-step approach in implementing the reforms.