Vice-premier confident over growth
Cary Huang and Denise Tsang in Boao
In a bid to defy doomsayers' predictions that the days of China's booming economy are coming to an end, Vice-Premier Li Keqiang said yesterday the country had the ability to maintain stable, relatively fast economic growth over the long run.
His comments were made during the opening ceremony of the 2012 Boao Forum for Asia on the southern resort island of Hainan .
While some Asian countries faced downward pressure on growth and inflationary pressure, China's economic fundamentals were good, he said during the forum, joined by political and business leaders from the region.
The central government would stick to its policy of stabilising economic growth while curbing inflation, Li said.
Li, who is expected to become premier in March, also pledged to make further efforts to restructure the economy and to provide a level playing field for foreign investors. His comments come as concern is mounting over the sustainability of China's economic growth amid a global slowdown.
Growth in the world's fastest-growing major economy slowed to 8.9 per cent in the fourth quarter of last year - the fifth consecutive quarter of slower growth. Some economists say the country's three decades of double-digit growth has come to an end, amid rising costs and a shortage of labour in a rapidly ageing population.
Premier Wen Jiabao said last month the government had scaled its economic growth target back to 7.5 per cent this year, down from the 8 per cent Beijing had set as a minimum growth target in the past eight years.
Fan Gang, an influential Chinese economist and former central bank adviser, said the economy was on track to grow between 8 and 9 per cent this year, with a more moderate pace of expansion helping to contain inflation.
Bank of America Merrill Lynch economist Lu Ting said Li was being cautiously optimistic about the mainland's economic growth, which would meet the central government's target of 7.5 per cent this year, or an average rise of 7 per cent in the 12th five-year plan to 2015.
Li said China would accelerate the shift of its economic base away from exports and investment, while moving its focus to consumption.
'Boosting domestic demand is the top priority when we are trying to rebalance the economy, and China's urbanisation will provide the greatest potential for boosting domestic demand,' he said.
Speaking on the sidelines of the forum yesterday, Singapore's emeritus senior minister, Goh Chok Tong, said that to minimise the negative effects of a slowdown on China's economy, countries in the region needed to watch what the Chinese were consuming as their country sought to boost domestic consumption and cut its reliance on exports.
Also present, former US Treasury secretary Henry Paulson urged China to further open its capital markets to foreign competition and make the yuan a market-determined currency.
But Li sounded a note of caution on the global economy. 'The world economy is showing some signs of recovery, but the deep impact from the global financial crisis has not disappeared, and Europe's sovereign debt crisis lingers,' he said.