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China's Two Sessions 2017
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Premier Li Keqiang pictured during his press conference in Beijing. Photo: EPA

The many things China doesn’t want: highlights from Li Keqiang’s press conference

Beijing doesn’t want trade war nor chaos at its doorstep. It also doesn’t want Asean nations to take sides on the South China Sea, or further calls for Hong Kong independence, among other things

The Chinese premier took a wide range of questions during his media briefing at the end of the National People’s Congress in Beijing, including on the economy and China-US relations. We give you the six key points from Li Keqiang’s press conference on Wednesday.

1. China-US relations

Premier Li highlighted the damage that any trade war between the two countries would inflict, saying American companies would be the first to suffer.

“We don’t want to see any trade war breaking out between the two nations. That wouldn’t make our trade fairer,” Li said. “Our hope on the Chinese side is that no matter what bumps this relationship hits, we hope it’ll continue to move forward in a positive direction.”

Li confirmed that Beijing and Washington were in talks to arrange a summit between President Xi Jinping and his US counterpart Donald Trump. Media reports have suggested the meeting could be held at Trump’s Mar-a-Lago resort in Florida.

Li said: “I believe whatever differences we may have we can all sit down and talk to each other and work together to find solutions.”

Li added he felt optimistic about Sino-US relations, despite the two nations’ differences over a slew of issues from trade, alleged currency manipulation and security concerns.

He also reiterated the importance of the US recognising the one-China policy on Taiwan as it was the foundation of the two countries’ ties.
Taiwan's President Tsai Ing-wen pictured during her phone conversation with Donald Trump last year. Photo: Reuters

Trump’s phone call with the independence-leaning Taiwanese President Tsai Ing-wen shortly after he was elected threw ties with China into disarray. The US president later told Xi Jinping that his administration would follow decades of protocol and adhere to the one-China policy.

Li dismissed allegations by Trump and other senior US administration officials that China was stealing American manufacturing jobs. Li said trade with China created over 1 million jobs in the US last year alone.

He urged both nations to shelve any immediate differences and instead focus on expanding common interests so that the percentage of points at issue will fall in time.

2. Hong Kong

Li did not directly address the question of Hong Kong independence, which he touched upon in his annual government work report for the first time at the beginning of the National People’s Congress earlier this month. “The notion of HK independence will lead nowhere,” he told delegates 10 days ago.

Instead, Li highlighted more economic cooperation between the mainland and Hong Kong and gave details of the new initiative to allow Hong Kong investors to invest in the Chinese bond market.

The government plans to launch the bond market scheme this year, Li said. “It will allow overseas investors to buy mainland bonds via Hong Kong and Hong Kong is at an advantageous position,” he said.
Tourists posing for pictures against a view of the Hong Kong skyline. Photo: AFP

The scheme follows the stock connect system between Hong Kong, Shanghai and Shenzhen and will help maintain Hong Kong’s position as an “international financial centre” as well as opening more investment channels for Hong Kong residents, the premier said.

He added that the principle of “one country, two systems” in Hong Kong needs to be perceived and implemented in its entirety. “This principle needs to be applied without being distorted,” he said.

3. South China Sea and Asean

Li was asked by a Thai reporter about the dilemma faced by Southeast Asian countries caught between the power play between China and the US in the region amid fresh reports that the mainland has started fresh construction work on islands in disputed areas of the South China Sea.

Li said China does not want to see Southeast Asian countries compelled to “pick a side” between Beijing and Washington and China would continue to support Asean’s leadership role in regional affairs.

“We don’t want to see [Asean countries] have to take sides just like what happened during the cold war mentality,” Li said.

Southeast Asian neighbours remain China’s priority in its neighborhood diplomacy despite longstanding differences over territorial disputes in the South China Sea, he said.

China's Liaoning aircraft carrier with an accompanying fleet conducting a drill in the South China Sea in December. Photo: Reuters

He reiterated that China remains committed to its position of resolving disputes between China and rival claimants in the South China Sea and will continue to push for the negotiations with Asean countries in the regional bloc over a code of conduct for countries in the ocean’s waters.

Beijing’s talks with Asean over the code of conduct have made substantive progress, he added.

Li also urged Washington to work with Beijing to ensure stability and create opportunities rather than troubles over the longstanding maritime disputes, amid simmering tensions.

Li’s comments come after China announced a lower-than-expected seven per cent defence budget increase this year. Trump has promised a “historic” increase in military spending of more than nine per cent, or US$54 billion.

Li said the Washington and Beijing have a wide range of common interests in Southeast Asia as many American companies have set up their Asia-Pacific headquarters in China. Beijing hopes interactions between the two great powers will not be “a source of trouble”, said Li.

4. Economy

Li said his big achievement over the past four years since he took office as premier was that he has kept Chinese growth rate at a reasonable range.

Fears last year about a hard landing appear to have transformed into sighs of relief as the Chinese economy stabilises, largely thanks to government-backed infrastructure spending.

Li said he had heard too much talk of a “hard landing”. “The talk that there will be a hard landing in China should end now,” he said.
Traffic in Beijing’s central business district. Photo: EPA

Li added that China’s steady economic growth over the past four years was not achieved by all-out stimulus, but by upgrading industry and increasing consumption.

As for the economic growth target of “about 6.5 per cent” for 2017, Li said the growth rate was “not low, and not easy [to achieve].” As such, Li said China would remain as an important force empowering global economic growth.

Li said the biggest challenge was to reduce administrative procedures and red tape. He gave the example of one local government where 108 different chops were needed to gain a local authority permit. This had been reduced to one, he said.

5. North Korea

Li warned “tensions on the Korean peninsula may lead to conflict” and bring harm to all parties.

“It’s common sense that no one wants to see chaos on their doorstep,” he said.
A file picture of North Korean leader Kim Jong-Un. Photo: AFP

Intriguingly, he made no mention of Beijing’s row with Seoul and Washington over the deployment of a controversial anti-missile system in South Korea. Relations between China and South Korea have plunged to a new low over the deployment.

South Korea says the system is needed amid growing concerns over North Korea’s nuclear arsenal, but Beijing claims its poses a danger to its own security.

6. Parting shot?

Li also touched on smog, relations with Taiwan, ties with the EU and Russia and the forthcoming “One Belt, One Road” trade initiative summit in May. He made no mention, however, of the Communist Party Congress to be held later this year which will see changes among the top leadership.

He also did not touch on or corruption, human rights, Tibet or Xinjiang during his answers to journalists’ questions.

It remains unclear if this was Li Keqiang’s last press conference as premier as there is speculation that he may only stay on in the role until he finishes his five-year term in 2018.

One comment by Li at the end of the press conference left many reporters pondering: “It’s time for lunch. We will see each other again when there’s a chance,” he said.

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