China faces enormous pressures, premier tells international audience at forum

Premier Li Keqiang and World Economic Forum Executive Chairman Klaus Schwab attend the Annual Meeting of the New Champions, also known as the Summer Davos, in Tianjin. Feng Yongbin / China Daily

Premier Li Keqiang said on Monday he is optimistic about China's economy despite downward pressures and increasing uncertainties in the global economy.

Li acknowledged that the Chinese economy is facing enormous downward pressures and "difficulties that cannot be underestimated".

"Due to the severe and complicated international environment and long-accumulated, deep-rooted domestic problems, the foundation of a stable Chinese economy is not solid," he told business leaders, policymakers and academics from more than 90 countries in Tianjin.

Addressing the Annual Meeting of the New Champions, also known as the Summer Davos, he said that by recognizing the difficulties it faces, China is showing it has the resolve and capability to overcome these challenges.

"In the face of mounting downward economic pressure, we did not resort to indiscriminate measures," the premier said. Instead, China has forcefully pushed for structural reform and fostered new growth engines while transforming traditional growth drivers.

As a result, the country's economic structure is "optimizing", with the number of new enterprises growing faster than in the past two years, and with services becoming the largest contributing sector to the economy.

"The Chinese economy will not head for a hard landing, and we are capable of meeting our targets for this year," Li said.

He said the country will continue to open up its service and general manufacturing sectors and keep the renminbi generally stable within a reasonable and proper range.

He vowed that China will build a fairer, more transparent and predictable investment environment for foreign investors, and give equal treatment to domestic and foreign businesses.

"Our attitude toward the Chinese economy, at present and in the future, is optimistic," Li said.

He also said the British vote last week to leave the European Union had already had an impact on international financial markets, adding new global uncertainties.

"We would like to see a united and stable EU, as well as a stable and prosperous Britain," he said.

Li said that in the context of globalization, no country can talk about its own development without discussing the world economic environment.

He proposed structural reform, industrial upgrades and efficient global governance as ways to get the world economy on a track to steady recovery.

Li vowed to continue reducing excess capacity in the steel and coal sectors in "a market-oriented and lawful" manner, and to take measures to re-employ steel workers and coal miners made redundant.

Gary Coleman, global industry and senior client adviser at Deloitte Consulting, said Li has been very consistent in encouraging innovation and entrepreneurship and setting a business-friendly public policy.

"I was particularly interested in his comments on pro-growth economic policies around lower taxes and a larger number of sectors being available for foreign participation," he said.

Ondrej Frydrych, CEO of Home Credit Consumer Finance Co, said: "I agree with Li on the assessment of the current macro status for the Chinese economy. … We are confident and optimistic in this country, and there is no doubt about it."

Cai Xiao and Zhong Nan contributed to this story.