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China Premier Li Says Economy Stable, To Push Ahead With Reform

posted 11 Sept 2013, 06:56 by Mpelembe   [ updated 11 Sept 2013, 06:57 ]

Chinese Premier Li Keqiang says the economy in China is stable and the leadership in the world's second biggest economy will push ahead with reforms.

DALIAN CITYLIAONING PROVINCECHINA (SEPTEMBER 11, 2013) (CCTV) -  Chinese Premier Li Keqiang pledged on Wednesday (September 11) to push ahead with reforms, with financial system change at the centre of his agenda, noting that the world's second-largest economy was stable but there was a need to guard against risks.

Li also said in a speech to government leaders and company executives at theWorld Economic Forum in the northeastern port city of Dalian that China will keep its monetary policy stable even if capital markets show volatility.

"China's economy is at a critical stage, and only with restructuring and updating canChina sustain its development," Li said.

Li, who took office this year, has an ambitious plan to restructure China's economy away from credit, investment and export driven growth to one where consumers provide the main impetus.

He has said he will accept slower growth rates in order to push ahead with reform, though has had to introduce policies to stabilise the economy after a sharper-than-expected slowdown threatened to derail the reform push.

Recent economic data has shown some of the impact of those policies, with factory output in August hitting a 17-month high and retail sales growing at their fastest pace this year.

China's growth target for 2013 is 7.5 percent.

Li has rejected the idea of using stimulus to push growth, mindful of the risk of a debt overhang should too much money flow into the economy. Total social financing, a measure of liquidity in the economy, surged in August, pointing to strong demand for credit.

"On the fiscal policy front, we will insist not to expand our fiscal deficit, but will improve the expenditure structure by cutting administration fees and increasing spending in some key areas, such as western regions and social welfare projects," he said.