Fiscal policy to stay proactive
Print Edition
ECONOMIC reforms are high on the government’s agenda this year, Premier Li Keqiang told the National People’s Congress yesterday, adding that the country’s growth rate target had been lowered to rebalance the economy during a year of possible “formidable difficulties.”
The target for 2015 is around 7 percent, compared with last year’s 7.5 percent target, Premier Li said as he delivered the government’s work report at the annual session of the NPC.
“China will stabilize and improve its macroeconomic policies to make sure its growth is within a reasonable range,” Li said. “We will pay more attention to fine-tuning policies in accordance with the real growth and accelerating reforms to rebalance the economy.”
Li said the target for 2015 takes into consideration what is needed and what is possible.
“This target is both aligned with our goal of constructing a moderately prosperous society and is appropriate in terms of the need to grow and upgrade our economy,” Li said.
“It is also in line with the conditions in China.”
Last year, China’s gross domestic product expanded 7.4 percent from a year earlier, the weakest expansion since 1990. In the year ahead, Li said, the difficulties China could face may be “even more formidable” than in 2014, with downward pressure on the economy building up and deep-seated problems in development surfacing.
Li said China will continue to implement a proactive fiscal policy and a prudent monetary policy while paying greater attention to anticipatory adjustments.
Meanwhile, it was imperative to intensify structural reform and bolster efforts to implement the strategy of pursuing innovation-driven development.
Financial reform, state-owned enterprise reform, fiscal reform and price reform will be high on the agenda this year, Li said. “We will move ahead with all such economic reforms to better serve the real economy.”
For financial reform, the country will further liberalize interest rates and improve the central bank’s framework for their regulation.
For state-owned enterprise reform, Li said China will take systematic steps to implement mixed-ownership, and accelerate structural reform of companies in the electricity, oil and natural gas industries.
“China will work through multiple channels to relieve state-owned enterprises of their social obligations, while ensuring that the legitimate rights and interests of workers are protected,” Li said.
Li also said China “will continue to push ahead with other reforms in science, technology, education, culture, medical, pensions, public institutions and the housing provident fund.” He added: “Development needs to be driven by reform, and people are expecting real benefits that reforms can deliver.”
The government work report also unveiled a number of economic targets for this year. China aims to create 10 million new jobs, keep inflation under 3 percent and try to land trade growth at around 6 percent.
The government plans to invest at least 800 billion yuan (US$130 billion) in railway construction this year, and another 800 billion yuan will be spent on water conservancy projects.
Urbanization will be accelerated and China will also strengthen efforts on sea exploration, Li said.
China will also push manufacturing to a higher level, with growth better coordinated with the fast expansion in services.
“We will implement the ‘Made in China 2025’ strategy, seeking innovation-driven development, applying smart technologies, pursuing green growth and upgrading China from a manufacturer of quantity to one of quality,” Li said.
In the 35 years between 1978 and 2013, the annual growth of the Chinese economy averaged close to 10 percent.
However, the “good old days” had to end, he said.
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