Li pledges support for entrepreneurs and says the country will open further to foreign players
The economy faces many challenges and reaching its growth target will not be easy, he says
Premier Li Qiang embarks on his new job as China confronts a series of domestic and international challenges to the economy. Photo: AFP
As he faced the media for the first time as premier on Monday, Li Qiang focused on boosting confidence – in China’s ailing economy and its private sector, and among foreign investors.
Li, 63, the former Communist Party chief of Shanghai, was confirmed by the national legislature as the new premier on Saturday and comes into the job as China confronts a series of domestic and international challenges to the economy.
In addition to weak consumer and private sector confidence, the country is grappling with faltering exports and escalating tensions with the United States and its allies.
Last year, its pandemic-hit economy grew just 3 per cent – the country’s second lowest rate since 1976 – and this year it is aiming for around 5 per cent.
To get there, Li sought to reassure entrepreneurs in China that the country would consistently support the private sector.
China’s new premier Li Qiang outlines priorities in first press conference
Beijing’s commitment to protect the private economy has come under a cloud in recent years after an array of regulatory crackdowns in sectors ranging from internet technology to private education and property development.
“Last year there were some incorrect remarks about the development of the private economy, which have caused worries among some entrepreneurs,” Li said, without giving details.
He also vowed to foreign businesses that China would continue its reform and opening-up policy, and that it welcomed foreign investment.
Referring to conversations with foreign executives in Shanghai – including from American companies – Li said: “They told me that they are optimistic about [the future of] Shanghai and China.
“China and the US should work together. Containment and suppression will do no good to either of us,” he said, adding “decoupling” was just hype.
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Louis Kuijs, chief economist of Asia-Pacific at S&P Global Ratings, said the premier’s emphasis on opening up “should allay fears that China is turning inward”.
“It is good to see that despite the challenges from decoupling and containment, Li underscored China’s commitment to the opening-up policy,” Kuijs said.
At the press conference, which lasted about 90 minutes, Li also pledged to “fully support Hong Kong and Macau’s integration into the overall development of the country”.
Hong Kong’s role as an international hub of finance, shipping and trade would not be diminished, but only consolidated, he said.
He also said Beijing would encourage more Taiwanese businesspeople to visit the mainland and described both sides of the Taiwan Strait as members of the same family.
His conciliatory remarks came after President Xi Jinping said in an earlier speech to the National People’s Congress deputies on Monday that China must oppose pro-independence and secessionist activities and interference by external forces.
Overall, Li had a less-than-rosy outlook for the global economy this year, saying stable economic growth would be a test for many countries, given the many uncertainties.
“The size of China’s economy has now surpassed 120 trillion yuan (US$17.3 trillion), which is a huge base,” he said.
“It’s not an easy task to achieve 5 per cent [GDP] growth this year, as we are facing a lot of challenges, but we’ll double our efforts.”
One of the biggest challenges will be to create jobs for the record 11.58 million new graduates expected to enter the job market in China this year.
Li said China would improve education for its workforce, support professional skills training and improve services for jobseekers.
At the same time, the country’s overall population is shrinking, with 850,000 fewer births than deaths last year – the first decline since 1961.
Li said authorities were studying whether to postpone the official retirement age.
In China, the legal retirement age for men is 60. For women, white-collar workers can retire at 55 and blue-collar workers at 50. Those ages have not been changed for more than 70 years, compounding the looming population crisis.
Some of Li’s strongest words were reserved for government officials – especially young cadres – who “sat” in government offices and were reluctant to make decisions.
They should talk to communities to get feedback, he said.
“When dealing with matters of administration and approvals, local governments should not just slam on the brakes but hit the accelerator,” he said.
Throughout his responses, Li referred repeatedly to Xi’s past speeches and party documents. He also highlighted his experience in China’s regions, including the prosperous private hubs of Shanghai, Jiangsu and Zhejiang provinces.
Yue Su, principal economist with the Economist Intelligence Unit, said Li’s priorities were to promote the private economy and build a service-oriented government.
She said Li’s remarks showed he would focus on policy implementation and take a more hands-on approach in managing local governments.
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“This is overall good news, but also reflects Li Qiang’s priority will be to improve the efficiency of China’s current development model rather than pursuing a completely different approach,” she said.
The British Chamber of Commerce in China said the continued focus on opening up, along with the removal of Covid-19 restrictions, had helped to gradually revive its members’ confidence in the past two months.
However, the uncertainty around the recovery of the Chinese economy and consumer demand, and the impact of geopolitics meant British businesses were “still cautiously optimistic about their growth prospects in the coming years”, the chamber said.
“We hope that the Chinese government continues to roll out specific policies to boost domestic demand, and increase stability and transparency in the business environment,” it said.
Eric Chen, who owns a lighting products trading company in Zhejiang province, said he was impressed by Li’s pragmatism.
“I think he’s pragmatic and willing to support the private economy. I hope his promises to the private sector will be realised,” Chen said.
“We really need to ensure sound economic growth after private companies were badly hit by Covid restrictions last year. Private companies can work out their own way to survive even without the help of the government, as long as the government doesn’t mess around.”
Liu Shengjun, a Shanghai-based independent economist, said Li appeared to be an “easy-going” leader with strength in policy implementation.
“Although the central government talks a lot about supporting private business, turning those promises into action is important,” Liu said.
“[I think] Li has some advantages in understanding the needs of private firms and entrepreneurs and [he will] help ease their concerns.
“His pragmatic and down-to-earth attitude will raise hope that the government will do more to cut red tape and abandon the one-size-fits-all approach [in governance].
“[Li Qiang] also showed a strong commitment to reform and opening up, and his intention of making more friends overseas to break the external containment.”
