Chinese Premier assures stable foreign investment policy
September 11, 2014, 4:26 am

Chinese Premier Li Keqiang delivers a keynote speech at the opening of the Annual Meeting of the New Champions 2014, also known as the Summer Davos forum, in Tianjin, north China, Sept. 10, 2014 [Xinhua]

He urged foreign companies to scale up their R&D spending in China even as he vowed to speed up China’s switch to an economic model driven by innovation and technology.

China can meet the major economic goals this year and policymakers will not be distracted by short-term fluctuations of individual indicators, said Li.

“We have focused more on structural adjustment and other long-term problems,” Li told a congregation of more than 1,600 business leaders from across the globe.

China’s economy has had a rocky spell this year. Growth sank to an 18-month low of 7.4 per cent in the first quarter before edging up to 7.5 per cent between April and June.

In Tianjin on Wednesday, the Chinese Premier said economists should not be bogged down by China’s short-term performance.

“Rather, one should look at the overall trend, the bigger picture and the total score,” he added.

China is targeting a GDP growth of around 7.5 per cent in 2014.

Li also said China’s recent interest rate and forex liberalisation present challenges for companies, but the world’s second largest economy will forge ahead with reforms as necessary.

Li also said China will continue to improve the RMB exchange rate mechanism.

Electricity consumption, freight volume and other indicators showed signs of a slowdown in July and August. China’s power consumption in July expanded only 3 per cent year on year, much less than June’s 5.9 per cent jump, according to the National Energy Administration.

“That was inevitable and within our expectation,” Li said, “because the domestic and international economic situations are still complex and volatile.”

Meanwhile, China’s carbon emissions were cut by about 5 per cent in the first half of the year, the largest drop in many years, the premier claimed.

China has consumed less coal, electricity and oil and eased pressures on transport capacity in achieving the same GDP growth, he said.

“There is no turning back in China’s commitment to a sound eco-system. We have declared war on pollution and earnestly fulfilled international responsibilities,” he said.

The IMF forecasts China’s economic growth this year at 7.5 per cent, nearly triple the 2.8 per cent outlook for the United States.

 TBP and Agencies