Boao vow by Li Qiang comes at right time for China and world
- Premier’s stress on the importance of private sector, further opening up to foreign investment and trade should boost confidence at home and abroad amid economic challenges
New premier Li Qiang has used his first formal public speech to try to shore up confidence in the private sector and among foreign investors. A boost is much needed following the pandemic slowdown, regulatory shake-ups, geopolitical uncertainties and Western banking collapses.
That is not to mention restructuring of the financial sector and of technology development to tighten party control, revealed at the recent legislative session of the National People’s Congress. This has done little to foster investor optimism about further opening up, entrepreneurship and innovation.
A reminder of the importance of the private sector in creating jobs and wealth has rarely been so timely. Li’s remarks at the Boao Forum, therefore, could not have been more apt.
They made it clear the world’s second biggest economy wants to optimise a business environment, continue opening up to foreign investment and trade and play a stabilising role in global commerce fraught with political and financial turbulence. In that regard, Hong Kong Chief Executive John Lee Ka-chiu, who attended the forum, said the city would play its part in striving for competitiveness and development.
The annual forum in Hainan is a recognised platform for China to communicate on economic and diplomatic policy with external stakeholders – an urgent task amid waning foreign business confidence. Li did not miss the opportunity. He reassured his audience of political and business leaders that China remained a force for peace at a time of geopolitical tensions.
Coming off just 3 per cent GDP expansion last year and aiming for around 5 per cent this year, China spearheads the world’s hopes to avert recession and stagnation. To meet the party’s goals, it needs to create a business environment that allows the private sector to thrive and the state enterprise sector to grow stronger at the same time, while encouraging more foreign investment.
That leaves little room for policy miscalculation or self-doubt, and Li did not show any. “No matter how the world changes, we will always adhere to reform and opening up and be driven by innovation,” he said.
US military presence risks conflict in South China Sea, Boao Forum hears
In terms of opening up, one of Li’s first moves has been to court overseas investment, including meeting foreign executives, politicians and researchers at the China Development Forum in Beijing ahead of the Boao Forum. Li told them the mainland would align with international rules and strive to create a market-oriented, rule-of-law-based and internationalised environment.
This is what they need to hear, given concerns that strengthened party control of key areas of the economy, and the pursuit of self-reliance especially in technology, could result in the country turning inward. That would be a loss to the economy of both China and the world.
