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Premier Li Keqiang addresses officials on Friday. Photo: Xinhua

China needs new trade route to future, Premier Li Keqiang says

Tried and tested low-value-added model is no longer enough for country to stay competitive

Li Keqiang

China can become more competitive and try to stave off an economic slowdown by selling more equipment, investing more offshore and exporting manufacturing capacity, Premier Li Keqiang said on Friday.

Addressing officials and top state-owned enterprise executives, Li said China needed to revamp the old external trade models that had served the country for the past 30 years.

"The old way is no longer sustainable," quoted Li as saying in reference to China's reliance on low-value-added processing. "We have to help our firms export Chinese equipment and forge international cooperation in manufacturing capacity so that the focus of China's external trade can shift from quantity to quality."

Li said China would be more selective in its imports, focusing on advanced technology, key equipment and important components. It would also promote exports of high-value-added products, technology and services, reported.

At the Friday meeting, which included executives of state-owned rail and nuclear power firms, the government said it planned to cut red tape and costs for Chinese firms looking to extend their reach overseas.

"This will help us withstand the downward economic pressure and push China's development into new spaces," a State Council statement quoted Li as saying.

Li said China should bolster financial mechanisms to support companies investing offshore and streamline approval processes to help companies set up facilities overseas. Some sectors would still require stricter approvals, he said.

"We should clear up or remove unreasonable restrictions or costs holding back investment overseas to allow our industries to charge out into the world unfettered and rise up through facing competition on the global stage," he said.

Chinese companies in sectors from consumer goods to railways and nuclear energy are increasingly looking to tap overseas markets as growth at home slows, as well as to gain valuable technical knowledge through tie-ups with international firms.

Li said China had the expertise and ability to supply equipment and services to developing countries for big engineering projects, reflecting Beijing's push to create a modern day "Silk Road" that will connect countries around the region through infrastructure investment.

This article appeared in the South China Morning Post print edition as: China needs new trade route to future, Li says
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