China's new premier presses reforms as 'biggest dividend'

0 Comment(s)Print E-mail Xinhua, March 17, 2013
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Chinese Premier Li Keqiang on Sunday pledged to deepen comprehensive reforms in the country as the world's second-largest economy is seeking new momentum for development other than its large workforce.

"However deep the water may be, we will wade into it because we have no alternative," Li told a press conference after the closing of the first session of the 12th National People's Congress, China's top legislature, noting reform concerns the destiny of the country and the future of the nation. [More about the press conference]

Known for calling reform "the biggest dividend for China," Li explained that he sees great room for improvement in the country's socialist market economy.

"There is great space for further unleashing productivity through reform and there is great potential to make sure the benefits of reforms will reach the entire population," said 57-year-old Li as he met the press for the first time as China's premier.

Li's remarks came as some economists say the Chinese economy has reached a stage where reforms must be accelerated urgently as the demographic dividend, defined as a large proportion of the workforce in the entire population, is starting to dwindling sharply in the world's most populous nation.

Since being elected in November as one of the top leaders of the Communist Party of China, Li has facilitated reforms and showed toughness in advancing complex changes.

"Reform is like rowing upstream. Failing to advance means falling back," he once said at a symposium on advancing comprehensive reforms.

Li was endorsed as China's seventh premier by the top legislature on Friday, replacing Wen Jiabao.

In pushing forward reform, the new premier called for "courage, wisdom and tenacity" that policymakers can absorb from the people to make solid progress and pursue comprehensive reforms that cover all sectors.

He outlined key tasks and priorities in driving the reform forward, including those areas for reform that will make immediate and sustained impact.

Li vowed to accelerate economic transformation, make full use of fiscal, financial and pricing and other policy instruments, and pursue reforms of the budgetary system to make it more open, transparent, standardized and inclusive.

The government will welcome the public's effectiveness in supervising government expenditure and revenues, improve the structure of government spending, and tilt spending in favor of areas that will have a direct benefit for people's lives, Li said.

In reforming the country's financial sectors, Li reiterated the government will carry out market-oriented reforms in interest rate, exchange rate of the yuan, develop a multi-tier capital market and raise the share of direct financing.

Driving economic transformation through opening up is another key area Li hopes to press ahead.

"Looking ahead, our trade will continue to grow at a high speed in the years to come. That will create enormous opportunities for the world and help the Chinese enterprises to upgrade themselves in the course of fair competition," he said.

To improve people's well-being, Li noted, the government needs to reform the income distribution system and narrow the gap between urban and rural areas that involves 800 million rural residents and over 500 million urban residents, as well as bridge the gap between different regions.

While allowing more private capital to invest in the financial, energy, railways and other sectors, the government will also reform the areas of social security, medical and pension insurance to contribute to the labor mobility in the country, according to the premier.

Reforms will be carried out in social sectors to promote upward mobility, said the premier who has seen a "quite low" share of rural students in some universities in China

"We need to gradually raise that proportion so as to give hardworking rural students hope," Li told the televised press conference.

He acknowledged the difficulty in advancing reform as the nation has to shake up vested interests, which he said may be more difficult than "touching the soul".

But his determination remains even though he has to lead the government to navigate through uncharted waters.

"In advancing reform, the important thing is to take action," he said, "Talking the talk is not as good as walking the walk."


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