Li Keqiang Speech at Boao Forum

Straits Times: China premier Li Keqiang says govt will cut taxes and red tape, keep yuan stable
Li repeated previous statements that the country hopes to cut taxes by 500 billion yuan (S$105 billion) in 2016 and promote reforms to the value-added-tax (VAT) system.

He also reiterated that China would not devalue the yuan exchange rate to boost exports as it would not help Chinese firms become more competitive, adding that the government would continue to reduce overcapacity in steel, coal and other sectors while helping develop smaller private enterprises.

Full text in Chinese: 李克强博鳌亚洲论坛演讲:中国经济怎么看,怎么干

Some snips:
Second, jointly promote economic growth. Emerging economies and developing countries, 40% of the world's total economic output, the contribution of the past was once two-thirds of economic increment, in response to the 2008 financial crisis played a role in the backbone, but two have greater difficulty some of the country's economic growth fell sharply even negative growth. As Asia's emerging economies, most concentrated areas, the overall maintained a growth momentum. Last year, economic growth in developing countries in Asia, only reached 6.5%, the contribution to world economic growth rate of 44%. Therefore reasonable to boost confidence in Asia, but the need to stimulate vitality, power is formed, which can not only for himself in Asia, but also for the world economic recovery play a greater role. We also hope that the countries in the world to deepen cooperation and solidarity, to strengthen macroeconomic policy coordination, to jointly oppose trade protectionism in all its forms, especially the developed countries should adopt more growth-friendly policies, policy changes in some countries to avoid spillover benefits. China's positive initiatives to build the Asian financial [0.00%] Cooperative Association, is willing to improve cooperation with the parties to the construction of the Asian financial markets, to avoid large-scale joint regional financial turmoil again.

...I think, look at China Economy:

First, look at the whole. China last year although the growth rate slowed down, but on a 10 trillion dollar economy, it can achieve 6.9% growth rate, growth on a high base. And it is in the process of transformation and upgrading implemented. This year, the Chinese economy overall smooth start, but there is some positive changes. We launched a series of steady growth, adjusting structure, promoting reform measures, policy effects are emerging results are constantly accumulate.

Second, look at the trend. According to statistics, last year more than 1300 cities and towns million new jobs, and income growth exceeded GDP growth this year from January to February employment situation remains stable, 31 major cities around the survey unemployment rate remained at 5.1%, and last year the basic flat. In this process, accelerate the pace of industrial upgrading, services, equipment manufacturing and high-tech industry to maintain rapid growth. Continue to expand domestic demand, consumption is still double-digit growth. Consumption and services have become the main force driving China's economic growth. Meanwhile, the energy intensity and discharge of major pollutants continued to decline, which marks the quality of economic growth is improving.

The third is to look at the long term. Although China has become the world's second largest economy, but the per capita income is still in the world, the gap itself is also potential, especially the West there is a huge space and room for maneuver in China. China is still in the overall advance of industrialization and urbanization process, the domestic space, the development of toughness, there are innovative means. So, the long-term fundamentals are bullish on the Chinese economy has not changed.

...At the same time, we need to promote the financial and monetary system. For example, we are going to fully open the VAT sales tax reform, which is an important measure of structural reforms, this move is not only meant to give corporate tax cuts, preliminary estimates from the country this year to give businesses by 5000 billion yuan of tax, and policy orientation support services, especially in the development of the service industry. For them, the burden will be lighter. At the same time, this reform will also help unify the tax system, so that the financial and tax system more open and transparent, easy to social supervision. SMEs will derive more benefits. In the process, probably because experience problems, there will be some twists and turns, but in general, I am in the government work report has been talked about, all the industry is not only reduced the tax burden increase. While also reducing costs. Government to do so, is Fangshuiyangyu. In the revenue decline, we are still willing to use short-term revenue "minus" in exchange for the sustainable development of the potential of "increasing." This in itself shows that we are determined to create a dynamic invigorating, but also that we have a certain amount of fiscal space.

In the financial sector, we will also promote the full range of regulatory reform, is more conducive to multi-level capital market development, we are still exploring how to use market-based approach to debt, and gradually reduce leverage. Reform is open, we will focus on promoting the outside world, including the expansion of the orderly liberalization of services, finance and other fields, to further fight the Chinese broader, better environment, the best destination for foreign investment. I remember years ago I announced here before, in a timely fashion, "Shanghai-Hong Kong Stock Connect." This year I announced here this year to choose the launch, "Shenzhen-Hong Kong through." All these indicate that China's capital markets are constantly opening up.

RMB will remain at a reasonable and balanced level stable, China is a responsible big country, China's development of the fundamentals have not decided the yuan, there will not be a long-term possibility of devaluation. China will promote self-initiated, gradual and controllable principle of the exchange rate market, but will not use devaluation to stimulate exports, so it is not to stimulate high-quality products, not to infuse courage to competition, the courage vigor creation. We would like to launch the world's escalating, high-end products.

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