China's Premier Li says confident in economy, vows no hard landing

China's Premier Li Keqiang defended the government's economic policies on Wednesday, vowing there would be no mass layoffs and no hard landing for the world's second-largest economy even as the government presses ahead with painful reforms. While conceding that downward pressure is increasing, Li and other top officials at the annual meeting of parliament this month have repeatedly tried to reassure jittery financial markets and China's major trading partners that Beijing is able to manage the slowing economy.

"We are confident that as long as we continue to reform and open up, China's economy will not suffer a hard landing," Li said at a news conference at the end of the parliament meeting. "Economic productivity is being held back by unnecessary government interference and we need to create a more level playing field and more oversight," he said, adding that China plans to cut red tape for businesses, devise ways to reduce corporate debt and improve financial regulation. The country's top economic planner made a similar attempt to calm investors' jangled nerves earlier in the 12-day parliamentary session, saying that authorities had ample policy tools to ensure growth remains within a "reasonable range", remarks which were repeated by Li on Wednesday. China's "supply-side reforms", which include tax cuts, will unleash fresh economic growth drivers, Li added, at his one news conference of the year, a staged event where journalists are often pre-selected to ask questions. "Instead of resorting to massive stimulus measures, we have chosen a more sustainable but more painful economic path, pursuing structural reforms," he said. Similarly, central bank Governor Zhou Xiaochuan took pains to expand on its views in the face of international criticism that China needs to communicate better about its policies, particularly after its surprise currency devaluation last year.

Zhou on Saturday appeared to rule out excessive stimulus to bolster the economy, but said China would keep policy flexible to counter any shocks. China is already in the midst of its most aggressive economic stimulus campaign since the global financial crisis, but Beijing is wary of unleashing massive spending as it did in 2008/2009, which left a legacy of high debt and excess capacity. Some analysts argue China wants too many things - economic growth but no painful reforms and no mass layoffs. "Premier Li signaled that China would continue to implement reforms this year including cutting red tape (and) improving the portability of social welfare...," Julian Evans-Pritchard, China economist at Capital Economics wrote in a research note.