China’s Li vows to keep 7.5% growth and spread opportunities

Chinese Premier Li Keqiang said the nation must maintain economic growth averaging 7.5 per cent a year through 2020, as the country seeks to double per capita income this decade.

“We need to maintain steady economic growth, prevent inflation and control latent risks so that there won’t be big fluctuations in economic performance,” Li told reporters at Beijing’s Great Hall of the People today. “That will not be easy, but we have favorable conditions in place and enormous potential in domestic demand.”

Li, 57, who took office two days ago, pledged to move some of the state’s tasks to markets and trim government bureaucracy while reducing environmental harm and pollution. State media transcripts that said Li discussed 7 per cent growth were at odds with his spoken remarks. The government’s fiveyear plan through 2015 calls for a 7 per cent pace.

Either way, leaders are signaling they are unwilling to tolerate expansion much slower than 2012’s 7.8 per cent, a 13- year low, as they try to rely more on consumption and less on exports and investment.

The economy expanded at an average annual rate of 10.4 per cent from 2001 through 2011. In his final annual report delivered March 5, departing Premier Wen Jiabao called China’s growth model “unbalanced, uncoordinated and unsustainable.”

The government’s five-year plan in 2011 envisioned pushing the economy to a more consumptionfocused development path. In the first two months of this year, the economy has moved back toward the old growth pattern. China’s exports showed the biggest JanuaryFebruary gain since 2010 and fixedasset investment accelerated, while retail sales slowed.

Wen’s report set a 7.5 per cent goal for expansion in 2013, the same target as last year. He called for China to “accelerate the change of the growth model” and “unswervingly take expanding domestic demand as our long-term strategy for economic development.”

At the Communist Party Congress held last November that inaugurated the leadership transition, then-President Hu Jintao set the target of doubling China’s per-capita income by 2020. The goal implied growth of 7 per cent from 2013 to 2020, Citigroup Inc. said at the time.

Li, at today’s press briefing, also vowed to fight against government graft, cut regulations and bureaucracy to give more room for market forces, and expand economic opportunities for more of China’s 1.35 billion people. He said the continued urbanization of the country would stoke further consumption and investment.

“We need to work to create equal opportunities for everyone,” Li said. Creating a “level playing field” will mean China’s people can “taste success.”

Li also called “groundless” accusations that China’s government engages in hacking computer networks in other countries. He said China would continue to overhaul its interest rate and exchange rate systems.

Today, speaking at the close of the parliament’s session, Xi said the government and party had to “resolutely fight against corruption.”

“We must make sure that power will be exercised in an open and transparent fashion, so that the people can supervise government more fully and more effectively,” Li said.

The efforts to curb corruption also extend to China’s environmental protection. Li said he was “depressed” by the pollution in Beijing and across eastern China and vowed to improve the country’s air and water quality as well as food safety.

“We shouldn’t pursue economic growth at the expense of the environment,” Li said. “Such growth won’t satisfy the people.”

China is the world’s biggest polluter, having passed the US in total carbon emissions in 2006. Beijing was blanketed in smog for much of January with air quality reaching the “hazardous” designation 19 times in 25 days.

Chen Jiping, a retired official, said March 6 that pollution has replaced land disputes as the leading cause of social unrest in the country, as citizens rally to oppose new refineries and chemical plants. Thousands of dead pigs have been found in Shanghai’s Huangpu river this month.

“It is fair to say that many, and at all levels, complain about the environment,” said Kenneth Courtis, founder of Tokyo- based advisory firm Next Capital Partners and former Asia vice chairman at Goldman Sachs Group Inc. “It doesn’t have to be the way it is — Japan cleaned itself up, and so can China.”