TIANJIN — Premier Li Keqiang on Sept 10 said China can meet the major economic goals this year and policymakers will not be distracted by short-term fluctuations of individual indicators.
Li downplayed the importance of some economic data from the past two months when delivering his keynote speech to the 2014 Summer Davos, which opened on Sept 10 in north China’s port city of Tianjin. At the meeting of more than 1,600 business leaders from across the globe, Li appeared more concerned by the job market.
China has targets of GDP growth around 7.5 percent and a consumer price index (CPI) increase of about 3.5 percent in 2014, with 10 million more urban jobs to keep the urban unemployment rate at a maximum of 4.6 percent.
The forum will discuss diverse issues including China’s economic outlook, shifts in finance and energy sectors and infrastructure.
In the first half of the year, China’s GDP expanded 7.4 percent from a year ago while the rise in CPI stayed at 2.3 percent.
Premier Li said that while the Chinese economy had been under greater downward pressure since the beginning of the year, with an intricate global economic environment and slow recovery in developed countries, the government would not be distracted by minor fluctuations of individual indicators.
“We have focused more on structural adjustment and other long-term problems,” Li said.
The premier’s remarks came after electricity consumption, freight volume and other indicators showed signs of slowdown in July and August. Power consumption in July expanded only 3 percent year on year, much less than June’s 5.9 percent jump, according to the National Energy Administration. The August power figures will be released later this month.
“That was inevitable and within our expectation,” Li said, “because the domestic and international economic situations are still complex and volatile.”
When observing the Chinese economy, the world should not just focus on short-term performance or on a particular sector, said Li. “Rather, one should look at the overall trend, the bigger picture and the total score.”
As Premier Li sees it, the positives in China’s economy are not just more jobs and higher incomes, but structural upgrading: The government’s goal in maintaining stable growth is to ensure employment.
At the forum, Li revealed a new survey of urban unemployment in 31 large cities. The survey, which should be a better indicator of the real job situation than registered data, found unemployment to be around 5 percent in the first eight months of the year, with more than 9.7 million urban jobs created, 100,000 more than during the same period last year.
“Using by the principle of range-based macro-control, we believe real economic growth is within the proper range, even if it is slightly higher or lower than the 7.5 percent target,” Li said.
As the economic aggregate continues to expand, Li said, growth will mean more jobs and there will be a greater tolerance of fluctuations.
Since the beginning of this year, the government has radically altered administrative reviews and approvals, removing or delegating to lower levels administrative approval of more than 200 items.
Business registration has also been overhauled nationwide. The financial threshold for starting a new businesses is considerably lower now, and there are far fewer restrictions; a great boost to business development in the whole country, Li said. In the first eight months, more than eight million new businesses were registered, and reforms in financing, investment, taxation and logistics have increased job opportunities even further.
China will make good use of the “golden key” of innovation to maintain medium-high growth and move toward a medium-high level of development, he added.
Li believes China’s economy is highly resilient, with plenty of potential and ample room to grow. A full range of tools for macro-control are at the government’s disposal.
“The measures we have taken are good both for now and for longer-term interests. They mean we can prevent major fluctuations and make a hard landing even less likely,” he added.
“Instead of adopting a strong economic stimulus or easing monetary policy, we have vigorously promoted reform and economic readjustment,” he said.