Li Keqiang Speaks at Davos

Li Keqiang states 8 important facts at Davos.

1. The Chinese economy has been subject to downward pressure
2. Economic data will inevitably fluctuate monthly and quarterly
3. Systematic risk in the stock market has been prevented
4. The RMB exchange rate is fundamentally stable
5. Do not desire to increase exports via currency depreciation
6. China still wants foreign investment, but the policy will change
7. Self-imposed emission reduction targets add pressure
8. There are some problems with urbanization

iFeng: 李克强达沃斯说的中国经济8句实话 句句透露大量信息

Li also said local government debt wasn't a concern because 70% of it was from investment.

iFeng: 李克强:担心中国债务风险是多虑了 地方债70%有投资性回报
As for China's government debt, the risk is controllable, because the level of debt ratio is still relatively low. For example, the central government debt less than 20% GDP, local government debt over 70% of the investment, there are rewards. Moreover, we are still regulate local debt issuance, and open the main entrance, blocking the back door. Someone should say the Chinese government debt will cause big risk is much concern. Of course, I do not deny that you have just the Chinese government debt concerns questions. Chinese people is philosophical concepts of all things must be prepared, which is also true.

As for the reform of the financial system, China will continue to push forward, because this is the need for China to maintain financial stability is the need of China's opening. For example, we have recently cut interest rates fall registration process to let go of the one-year deposit interest rate ceiling above, we will relax the entry of private banks, including foreign orderly entry and China's cooperation, etc., these measures will gradually roll out. In general, the direction of reform will not change, the pace of reform will not stop. Of course, reform is a gradual step.

ATimes: Li says China doesn’t want a currency war
“If a currency war does happen, it would only hurt China,” Li said. “The continued devaluation of the yuan is definitely not conducive to the currency becoming internationalized. This is not our policy preference.”

Speaking at the World Economic Forum, the Switzerland-based corporate think-tank which runs the Davos summit of world leaders, Li tried to convince investors that the major risks China’s economy has faced over the summer have been quelled that the financial system is stable.
The risks seem higher than ever now. It seems people are way to focused on the stock market and China is reacting to this. The stock market is a sideshow to the main event.

iFeng: 李克强接受顶级商界大佬采访实录
We do not want to stimulate exports through devaluation of the renminbi, which is not in line with the direction of our restructuring, we do not want to see the "currency war" took place in the world, China and the world as a high degree of integration of the major economies, if it occurs "currency war" against China only harm less favorable. For example, after the slight pullback in the yuan exchange rate, I have asked the relevant departments and specialize in export business, they want to maintain the basic stability of the RMB exchange rate on a reasonable and balanced level. Because if there is a continued devaluation of the market's expectations, he can not get a single commander. This is how China can contribute to export it?
All true, but if the choice is deflationary collapse or inflation via currency depreciation, China will do as most nations do and let the currency fall to its natural level. Keeping the yuan stable is the intervention, letting it fall is the free market solution to a massive increase in money supply and credit.

DNA: China's economic growth in proper range, says Li Keqiang
China will continue financial reform for the sake of stability and the opening up of the sector, the premier said.

China has scrapped the interest rate ceiling for both loans and deposits, established a link between Shanghai and Hong Kong exchanges and allowed more international investment.

The government will widen access for private and foreign capital to enter the sector in the future. The reform will not change its path nor slow its pace, Li said.

"The economy is stabilising despite a slower growth pace. On the one hand it is turning for the better while stabilising; on the other hand difficulties remain," Li added.

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