Li Keqiang: China not a regional systemic financial risk

2015 Winter Davos on January 20-24, held in Davos, Switzerland. Chinese Premier Li Keqiang said in his speech at the opening of the Forum, China now ranks second in the world economy of scale, base increases, even the 7 percent annual growth, current annual increment should reach more than 8000 billion dollars. Growth of 10% over five years ago, the number is even larger.
Li Keqiang said that China's savings rate of 50%, to provide sufficient funds for economic growth. Local debt 70%, mainly for infrastructure, there is a guarantee of the assets, the financial system is advancing, Chinese culture does not happen, systemic financial risks. Chinese economy will not be a hard landing.

The following is the speech:

Li Keqiang: Dear Schwab President, distinguished guests, ladies and gentlemen, friends, I am very pleased, five years later went to Davos, standing on the podium speech!

More fortunate in his spare time this morning, near the hilltop town of Davos I boarded from there overlooking Davos, Davos is indeed a beautiful, peaceful, serene town. But we now live in the world is not calm, even peaceful. We need to deal with the new situation, Mr. Schwab told me last night, Davos was the treatment of lung diseases convalescence shrine since the invention of penicillin, and the popularization of the industrial transformation of Davos. He rose from the lungs to the brain, it has become one of the centers of the world brainstorming intelligence. We need to respond to the new international situation penicillin new challenges. The world is far from peaceful, regional hotspots, local conflicts and terrorist attacks, is indeed one after another, for human society and constitute a real threat. Another weak global economic recovery, the trend of major economies, differentiation, repeated fluctuations in commodity prices, signs of deflation can be said to be worse crunch.

Many people hold the world outlook pessimism that the peace and tranquility of a problem, development is difficult to see the dawn, there is sage once said, when a problem arises, the problem can not be used to manufacture a way to solve it. To solve old problems, can no longer seek the confrontation, hatred closed the answer, the answer to new problems but also to find a way in cooperation, consultation, and we want to learn from the historical experience, the use of wisdom of the ages, the interests of all parties to seek common denominator . In tough times mankind always arouse the courage to overcome difficulties, burst out of the change, the power of innovation. Facing the complicated international situation, we strongly advocated the maintenance of peace, stability, and adhere to the peace and stability of the bottom line.

This year is the 70th anniversary of the victory over fascism, maintaining world peace and stability, in line with the common interests of all peoples. After World War II international order form, and universally recognized norms governing international relations must be maintained in nature can not be broken. Otherwise, prosperity and development would be impossible, because of weapons among nations, the Cold War mentality and zero-sum game, winner-take-all does not work, any geopolitical conflict should adhere to the political means to find a solution by peaceful means.

We oppose all forms of terrorism, China will continue to follow the path of peaceful development, maintaining regional stability, and no association with any country to compete against, the world should cherish their own eyes the same love of peace, so spend civilized, rational and justice open all over the world.

Faced pluralistic world civilization, we must work together to promote harmony advocate, that is, to uphold the concept of harmony. Cultural diversity and biodiversity, is our planet's most cherished natural treasures. Human society is different civilizations can bloom the garden, see different civilizations, different religions should respect each other's opinion, to live in harmony with and amiable, different can close, the international community should be tolerant to diversity in mind, seek common ground, inclusive total see, win-win cooperation.

Face of changing economic situation, we advocate to vigorously promote open innovation, that is, to stimulate the vitality of open innovation, the international financial crisis seven years of practice has proved that the only boat to ride out the storm, in an interdependent world, countries have the right to develop according to its own national conditions of macroeconomic policies. However, it should strengthen macroeconomic policy coordination with other countries to expand the rendezvous point of interest, and achieve common development. German proverb to the face of the winds of change, someone in walls, someone leaked, we advocate the flow, adhere to free trade and oppose protectionism and actively expand regional economic cooperation, to create a global value chain, to meet the new technological revolution soon. Macroeconomic policy is important, but structural reform is imperative, it is the consensus of the international community, although very difficult, but it should keep going. Thus, to be able to work together to form a global innovation, and enhance the development of a new kinetic world.

Ladies and gentlemen, I know that participants are very concerned about the prospects for China's economy. Perhaps some concern by the Chinese economy slow down the speed of drag, it was also worried by the impact of China's economic transformation. So, here I would like to introduce the situation in China. At present, the Chinese economy has entered a new normal, by the high-speed economic growth to the rapid growth. Development must be level towards the low end of the high-end Central level, for structural reforms to promote the firm. It should be noted that China's economic growth has slowed, both the world economy to adjust the depth of the background, there are inherent economic laws. China now ranks second in the world economy of scale, base increases, even the 7 percent annual growth, current annual increment should reach more than 8000 billion dollars. Growth of 10% over five years ago, the number is even larger.

The economy is in a reasonable range, not one-sided pursuit of speed, the speed will be tight economic relief, but also a free hand to advance structural reforms, structural adjustment, promote industrial upgrading, the structure is more advanced, more rational division of labor stage Evolution. Such a train of China's economy has slowed but it will not stall, it will run more robust, powerful, bringing the new economy, the formation of a new momentum.

Just past 2014, we have to do is follow this idea. Face downward pressure, we do not take strong stimulation, but pushing a strong reform, particularly the government take the lead in reform, decentralization and vigorously to stimulate the market and the vitality of enterprises. Annual GDP growth of 7.4%, which is in the world's major economies, is the highest. More importantly, more than 13 million new urban jobs, more than the previous year. In the case of the economic slowdown, employment increased rather than decreased, the registered unemployment rate in our survey unemployment rate is falling. CPI rose 2%, which is lower than we expected early goal proved we introduced a series of macro-control policy is correct and effective. More importantly, the structural reforms made important strides.

Admittedly, in 2015, China's economy still faces significant downward pressure, in this case, how to choose? Is the pursuit of short-term higher growth, or focus on long-term growth in? Enhance the quality of development. The answer is the latter. We will continue to maintain a strategic concentration, and implement a proactive fiscal policy and prudent monetary policy, will not engage in flood irrigation, but more emphasis on fine-tuning and better implementation of directional control, to ensure that a reasonable range of economic operation, while efforts to enhance the quality and efficiency of the economy. We are taking effective measures to prevent potential risks can debt finance, China's savings rate is as high as 50%, to provide sufficient funds for economic growth. Local debt 70%, mainly for infrastructure, is guaranteed by assets, financial reform is advancing, I would like the information we deliver here is that Chinese culture does not happen, systemic financial risks. Not a hard landing for the Chinese economy, China is still a developing country want to see and realize modernization still has a long way to go.

Peace is the basic condition for the development of China's reform and opening up and the pursuit of a happy people is the biggest driving force for development. Urban and rural and regional development is vast, huge domestic demand potential to further develop high-speed two decades, China's outlook will continue to improve, the world will bring more development opportunities. To withstand the downward pressure on the Chinese economy, we must achieve the "double high." It would have to say that the traditional way of thinking "no." Applauded for institutional innovation, determined to advance structural reforms, to be innovative macro-control, adding microscopic vitality. Urban and rural regions and industrial structure adjustment, especially in comparison to promote full employment, especially youth employment. Improving income distribution, and the people's livelihood, which is required to pay hard work, but we afraid of difficulties, only along the pro-reform, structural adjustment to go on the road, to be able to make the Chinese economy continues to achieve the rapid growth, so China's economic structure achieve high-end level.

Chinese economy is to stabilize the line to far better use must reform and innovation, better use of the hands of government and market, the implementation of the twin-engine, on the one hand to make the market play a decisive role in the allocation of resources, foster build a new engine. On the other hand you want to better play the role of government, the upgrading of traditional engines. We say that to build a new engine, is to promote the public entrepreneurship, innovation Peoples, China has 1.3 billion people, 900 million labor force, 70 million enterprises and individual industrial and commercial households, people are industrious and intelligent, if every cell of the whole society are activated, the absolute make the whole body is full of economic vitality, public entrepreneurship, innovation Peoples, bears endless creativity and unlimited wealth is inexhaustible gold mine. This reminds me of the rural reforms 30 years ago, we let go, liven up, so that farmers production and management autonomy to decide to mobilize the enthusiasm of thousands of farmers, the results of only a few years time, it to solve a long-term food problem is not resolved. It is institutional innovation, inspired creativity of millions of people, but also changed the fate of millions of people.

Two months ago I went to a small village in eastern China, where only 700 people, but they opened more than 2,800 registered shops, a few people who live in the dry, sold more than 30 million a day to the world of all kinds of goods. Of course, I have to explain them is to follow the labor law, and did not engage in unfair competition, but the limited time more use of them, which is diligent work hard, a vivid portrayal of public entrepreneurship.

Today, China needs to develop new sources of energy and vitality from the diversity, diversity generated collision sparks of wisdom, lit the torch of innovation and development. Volkswagen entrepreneurship, highly innovative, not only to release the wise, fame, expand consumption, and increase the wealth of society, but also to strengthen the public's well-being is more important is that all people have equal opportunity and the stage to realize their life value, promote vertical social mobility, to achieve social equity and justice, control, comfort and innovation, promote competition and prosperity, we will further deepen administrative reform, continue to be canceled, and the decentralization of administrative examination and approval, a comprehensive clean-called non-administrative licensing, promoting market Access negative list system, as market players relaxed, reducing the burden, but also conducive to corruption compression space, we will protect intellectual property rights law, while protecting the legitimate rights of various types.

We said to transform the traditional engine, the focus is to expand the public goods and services supply, China's economic development has made great achievements. But the lack of public goods and services is still short board, the current stock of public facilities in China is only 38% in Western Europe, 23% in North America, the service level is even lower than the same 10 percent in developing countries, while urbanization is more than 20 percentage points lower than in developed countries. It also bears a huge space in which public goods and services, increase supply in this area belong to the government since the beginning of responsibility, is the necessary measure to improve the livelihood of the people, but also a major force behind the expansion of domestic demand. This year we have identified key investment areas include the Midwest, railway, water conservancy, various shanty towns and rural and urban reconstruction of dilapidated buildings and so on. Government to increase financial input, while no longer a solo act, but by deepening the reform of investment and financing, to break the monopoly, to attract foreign investment in social capital and take the government and private enterprises, Sino-foreign cooperation, and government procurement of services and other ways to enlarge investment benefits.

For example, this year the construction of China's western provinces, a sewage treatment plant, needs funds more than 300 million yuan (6.2074, -0.0038, -0.06%), to successfully absorb the water company in Germany, but the German side than shares accounted for 70%. We will implement fiscal reforms, the introduction of new initiatives to support SMEs, to deepen financial reform, continue to promote the interest rate, exchange rate market. Accelerate small finance, especially in the development of private banks to expand the capital market, to promote price reform, substantial reduction in government pricing and project types, the maximum release price controls. Also, pay attention to the role of government in the construction of soft environment, the role of the good market regulation, to create an international market, legalization of the business environment, to provide quality and efficient public services for all market players.

China's reform and development will bring more business opportunities in the world, we will further relax foreign access, national treatment before admission plus explore the negative list mode, and foreign companies alike, focus, orderly expansion of finance, education, culture, medical, pension and other services outside world, promote the Shanghai FTA experience, so that international investors to dig out a steady stream of high-grade ore, we will cooperate innovative way of foreign investment, China's high-speed rail, nuclear power, aviation, telecommunications and other industries go out, butt local market demand.

Is accepted in international competition test, which itself is a joint venture of many products, the export itself is jointly explore third-party market, Davos, Switzerland, is a chemical sites, there are three chemical elements, speed, balance, courage, for China, is to maintain high growth which maintain good structural adjustment, as long as we insist on good shake, to promote public entrepreneurship, highly innovative, expanding public goods, public service delivery, with a twin-engine to help double the height, the Chinese economy will get rid of the middle-income trap curse, to track the sustained and healthy development, but also bring more opportunities for the world economy.

I believe that if the international community to join hands and stand up for peace and stability in the bottom line, uphold the concept of harmony, stimulate open innovation power, there is no insurmountable difficulties and obstacles, the survival of our world will usher in a better future.