China’s economy might be slowing but it will stay on track and not suffer a hard landing or the rapid decline from high growth to recession, Premier Li Keqiang said on Wednesday as the annual parliament drew to a close.
The National People’s Congress (NPC) adopted the 13th five-year plan for the economy at the Great Hall of the People, with China gradually beginning to cope with slow growth – at 6.9% in 2015, the rate was the slowest in 25 years.
Addressing the annual news conference, a highly choreographed ritual, Li said the country has the financial ability to withstand upheavals in the economy and the market despite slow growth and market volatility.
Economics dominated the news conference but Li referred to regional issues, saying China is capable of ensuring regional stability despite “differences” with some neighbours.
Without naming any country, he said: “It is natural that there are some differences between neighbours, but as long as we treat each other with sincerity and seek settlements with diplomatic and peaceful means, we are fully capable of maintaining regional stability.”
The government, he said, was taking steps to adjust to inevitable changes in the economy – cutting red tape, streamlining mammoth state-owned-enterprises and reducing over-capacity.
Job losses in state enterprises will not mean mass retrenchment and the government will set aside billions of Yuan to rehabilitate workers who lose their jobs.
He did not give a figure but reports have said millions of Chinese will lose their jobs, mostly in the steel and coal sectors, as the world’s second largest economy makes the grinding shift from a manufacturing-based to a service-based economy.
Li said global economic growth had been “…sluggish and China has been affected by the weak performance. The country is also going through a transition and some deep-seated problems, which have built up over the years, have become more acute.”
He added, “All these have added to downward pressure on China’s economic growth.”
“So long as we stay on the course of reform and opening up, China’s economy will not suffer a hard landing,” the premier said during the two-hour televised news conference.
Li took questions – vetted earlier by government officials – on a range of topics, including international relations and the regional security situation.
He said that “China-U.S. relations will move forward no matter who will win the presidential election in the US”. China and the US can cooperate in the Asia-Pacific region to maintain regional peace and regional stability, he added.
“The US has never left the Asia-Pacific, we can cooperate in the Asia-Pacific region and properly handle our differences,” he said.
The even had a touch of irony, with Li advising officials to freely interact with the media.
“Whenever you encounter journalists, no longer wave your hand and take a quick leave. Rather you need to open your mouth and answer the questions,” he said.
Clearly, such interactions would go even more smoothly if the questions are known beforehand.