Li Keqiang

Li Keqiang stresses market reforms at first press conference as premier

Premier says the entry barrier for private capital to compete in the finance, railway and energy sectors should be lowered

PUBLISHED : Monday, 18 March, 2013, 12:00am
UPDATED : Monday, 18 March, 2013, 5:28am

China still has "a lot to gain" from deepening market-oriented reforms, newly elected premier Li Keqiang said yesterday in his first news conference as helmsman of the world's second-largest economy.

Li, the first Chinese premier with a doctorate in economics, also said the government should lower the entry barriers for private capital to enter the finance, railway and energy sectors, urging that administrative powers be cut to allow markets to play a bigger role.

"I have often said that reform pays the biggest dividend for China," Li said. "This is because there is still room for improvement in our socialist market economy. There is great space for the further unleashing of productivity through reform and there is great potential for making sure the benefits of reform will reach the entire population."

The key to gaining bigger dividends from reform, he suggested, was to combine the potential of domestic demand and the vitality of creativity to form the new drivers of economic growth.

"We need to enhance the quality and efficiency of economic growth, raise employment rates and people's income and enhance environmental protection and the saving of resources so that we will fully upgrade the Chinese economy," he said.

Li outlined three priorities for his cabinet: transformation of the economic model; improving people's livelihoods; and enhancing social justice.

He promised to make full use of "fiscal, financing, pricing and other policy instruments" and to "pursue reform of the budgetary system" to make the Chinese economy more open, transparent, standardised and inclusive.

"We will drive economic transformation through opening up. The important thing is to further open up the services sector," he said.

In the financial sector, his cabinet will "pursue market-oriented reform of interest and exchange rates", he added.

"We will develop a multi-tiered capital market and raise the share of direct financing. We will also protect the lawful rights and interests of investors, especially small and medium investors."

Li also said the government needed to pay attention to income distribution.

"We need to confront the two biggest gaps in Chinese society - the gap between urban and rural areas and the gap between different regions," he said.

"In particular, we need to confront the former gap as it involves more than 800 million rural residents and 500 million urban residents."

His administration would aim to narrow these disparities by improving the social security system and enhancing vertical mobility among different classes, the premier said.

"We will reform the social sector to promote upward mobility. In some universities in China, the ratio of rural students is quite low. We need to gradually raise that to give hard-working rural students hope."

These initiatives could help promote social fairness, Li said.