Chinese premier promises to accelerate economic reforms

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Chinese premier Li Keqiang on Thursday promised to relax restrictions on foreign capital in financial markets and said the country would meet its economic targets.

“We are speeding up structural reform,” Li told delegates to the World Economic Forum’s event in Dalian, known as the Summer Davos.

China faces a “painful and treacherous” transition from overreliance on manufacturing toward a “growth model driven by consumption and investment,” Li said.

“It’ s true that the economy has come under downward pressure … but the Chinese economy will not have a hard landing,” he said in a speech on policy direction.

“Despite some moderation in speed, growth is stable,” Li said. China has revised its growth target for 2015 down to 7 per cent.

“We are prepared to undertake preemptive adjustment and fine-tuning as appropriate, and step up targeted macro regulation,” he said.

China will also continue to relax restrictions on foreign investment, he said.

The European Chamber of Commerce in China said Tuesday that recent interest rate cuts and sharp declines in stock market prices raised doubts over whether China would meet its growth target this year.

“The economy is slowing, and promised reforms are taking too long to
implement,” European Union Chamber of Commerce China president Joerg
Wuttke said.

China’s central bank devalued the yuan in August after the benchmark Shanghai index lost around 40 per cent from a peak in mid-June.

The move sparked worries that it could prompt other countries to also devalue their currencies to keep their exports competitive, in effect sparking a trade war.

Li said China would “never resort to a currency war” and said authorities would keep the yuan at an “equilibrium level.”

China on Monday revised down its economic growth for 2014 to 7.3 per cent from 7.4 per cent, already the weakest in 24 years.

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