THE world economy is showing positive signs but is still fragile and countries should rely on structural reforms, not quantitative easing, to support growth, Chinese Premier Li Keqiang said yesterday.
Li, who was meeting the heads of global bodies in Beijing, including Christine Lagarde, managing director of the International Monetary Fund, and World Bank President Jim Yong Kim, said countries should maintain free trade.
Li said that given China’s deep integration into the world economy, it cannot achieve economic transformation and upgrading without mutually beneficial cooperation with other countries.
“There are increased positive factors in the global economy and signs of warming-up in some aspects. But at the same time, the fragility persists and unstable and uncertain factors are still increasing,” Li told a joint news conference.
“Free trade is a good medicine for resolving problems. Through free trade, we can resolve many problems in the difficult recovery, help companies transform and give consumers more choices,” he said.
Li said China’s economy would continue to improve.
It grew 6.9 percent in the first half of the year, defying expectations of a slowdown and putting the country on pace to easily meet its target of around 6.5 percent. “Based on the growth trend in recent months, the economy will continue to maintain the trend seen in the first half,” Li said.
He also addressed China’s high leverage ratio, which has been the focus of a campaign by policy-makers to control risks.
China’s leverage has stabilized and has even shown some declines, the premier said.
He reiterated China’s pledge not to resort to competitive currency devaluation. Despite continuous decline in global trade, China has stayed away from competitive currency devaluation to boost exports and instead took the voluntary initiative to increase imports, Li said.
According to the premier, China has further broadened market access for foreign investment through repeatedly revising its foreign investment catalogue, which brought down the number of restrictive items by 65 percent from 2012.
China has set up 11 pilot free trade zones to explore a foreign investment management system based on pre-establishment national treatment plus a negative list, with the aim of cultivating a more open, enabling and rules-based business environment.
In recent years, Li said, new industries and new forms and models of business had made much greater strides than anticipated. Research showed that new drivers now contributed 30 percent of China’s economic growth and created 70 percent of new urban jobs.
Li said China has been implementing Internet-plus and big data strategies and fostering the digital economy, the sharing economy and the green economy through accommodating and prudential regulation to promote the healthy growth of these emerging industries.
Li said employment was the key to the pursuit of inclusive growth. Without employment, it would be difficult to raise incomes and reduce poverty.
The international community should work together to spread the benefits of growth more fairly and to more countries and more communities, he said.