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PM Meets the Press
Premier Li Keqiang elaborates on China's major policies
 NO. 13, MARCH 29, 2018
Premier Li Keqiang at a press conference at the Great Hall of the People after the conclusion of the First Session of the 13th National People's Congress in Beijing on March 20 (WEI YAO)

On March 20, Chinese Premier Li Keqiang took questions from the press after the conclusion of the First Session of the 13th National People's Congress (NPC) in Beijing. Edited excerpts of his comments follow:

Opening market wider

The Chinese economy is so integrated into the global economy that closing the door would only block China's own path.

The country still has a lot of room for opening up its market further and will lower overall tariffs on imports. Tariffs on popular consumer goods, including prescription drugs, will be slashed, while much-needed anti-cancer drugs may have no tariffs at all. Despite a deficit in service trade, China will increase efforts to relax control of market access to the service sector, including elderly care, medical care, education and financial services.

China will gradually relax and even scrap foreign-owned equity limits in some sectors and shorten the negative list for foreign investment. No compulsory technology transfers will be imposed on foreign investment in the general manufacturing sector and intellectual property rights will be protected.

Our goal is to make the vast Chinese market a fair place for both domestic and overseas companies under all types of ownership to compete. This will offer more options for the approximately 1.3 billion Chinese consumers, expediting the upgrade of Chinese products and services. China's opening up is a gradual process and should be perceived from a long-term and holistic point of view, as some seemingly minor reform steps might produce impressive dividends in the future. Like rowing a boat, opening up is a two-way movement entailing mutual efforts.

Peaceful development

China pursues peaceful development and will never seek expansion. It is a misinterpretation to view China's cooperation with other countries and its assistance to underdeveloped nations as strategic expansion. China's business cooperation with other countries follows market principles and business rules, and its assistance to developing countries comes without any political strings attached, which is far from political infiltration.

In pursuing the Belt and Road Initiative, China follows the principle of seeking shared benefits through consultation and collaboration.

China's economic growth contributes to both global recovery and global peace, as stronger cooperation and trade bring more negotiations and less conflict.

As a developing country, China hopes for a peaceful international environment to achieve modernization. China will not seek hegemony even if it grows stronger in the future.

China will not abandon a single inch of its own land, nor will it take or occupy an inch of another country's land.

While China is ready to fulfill its international responsibilities as a large developing country, it will focus on managing its own affairs well, as it still faces many difficulties and pressing issues concerning Chinese people's lives. China is clear about the substantial agenda it confronts.

Improving the business environment

China will continue to streamline administrations and delegate power to improve the business environment and further stimulate market vitality. It will cut the time it takes to open a business in China by another half and reduce the time required for reviewing a project application by another half. Measures will also be taken to have an e-platform at the national level for accessing government services online and abolish certification requirements that have no basis in law or regulations.

China has significantly cut the time for opening a business in the country thanks to efforts in recent years, but it still takes 22 days on average to do so. By comparison, it takes less than a day in some developed countries. China must further cut red tape and simplify administrative procedures.

Forestalling systemic financial risks

China is capable of forestalling systemic financial risks in response to concerns about tightened regulations on financial markets. The fundamentals of the Chinese economy are sound and the financial sector is stable. The capital adequacy and provision coverage ratios of Chinese banks are higher than international standards. And the huge deposit reserves in China's banking system will also help cushion risks.

Prevention of financial risks is key for China in what policymakers identify as the three tough battles: defusing major risks, reducing poverty and tackling pollution.

The country is moving swiftly and decisively to curb financial risks and crack down on market violations. Such moves aim to prevent risks from spreading.

The NPC has approved the merger of the country's banking and insurance regulators as part of a massive institutional restructuring plan. This will prevent regulation evasion.

The Chinese Government has lowered the fiscal deficit target by 0.4 percentage points to 2.6 percent of the GDP for 2018. China brought down the target on its own initiative as the economy steadied and fiscal incomes surpassed expectations. But the reduction does not mean a change in China's proactive fiscal policy.

I am confident that China will fulfill its main economic and social development goals this year.

Internet Plus

Internet Plus has played an important role in ensuring the steady growth of China's economy. The model has fostered new growth drivers and created the largest platform for the shared economy, giving opportunities to people to pursue entrepreneurship and innovation. China should maximize these benefits while addressing the possible defects of Internet Plus and taking a prudent, yet accommodative approach toward the supervision of Internet Plus.

Some new policies will be adopted, such as improving the conditions at home to allow Chinese Internet companies, which are listed overseas, to return to the A-share market. More preferable conditions, in accordance with the law, will also be created to encourage China's innovation-based companies to get listed on the domestic market.

China will further apply smart technologies to education, health care and other service sectors to achieve fast and sound growth of the digital economy.

Korean Peninsula nuclear issue

China will make utmost efforts to facilitate denuclearization, peace and stability on the Korean Peninsula. China welcomes the recent de-escalation of tensions on the peninsula and supports all efforts that are conducive to solving the Korean Peninsula nuclear issue through talks and negotiations.

China hopes that all parties will show sincerity and take concrete actions to get the nuclear issue back on the track of negotiations, so that new progress can be made toward denuclearization, peace and stability.

The Korean Peninsula is in China's immediate neighborhood, and thus directly concerns China's own interests, so one can well imagine how much attention China gives to this situation.

China-U.S. trade

There will be no winner in a trade war should one happen between China and the United States. A trade war would go against the principles of trade, which are negotiation, consultation and dialogue. China hopes both sides can act rationally rather than emotionally. In 2017, China-U.S. trade reached about $580 billion. Such a substantial trade volume could not have been achieved without business rules and market principles.

A large trade deficit is not something that China wants to see. What China wants is balanced trade, because otherwise bilateral trade will not be sustainable. China is going to further open the service and manufacturing sectors, which will create opportunities for the United States. I hope the United States will also ease its restrictions on the export of its hi-tech and high-value-added goods to China.

Intellectual property rights will also be protected rigorously.

As the world's largest developing and developed countries respectively, China and the United States are highly complementary economically, and a stable China-U.S. relationship is in the interest of both countries and the whole world.

China will remain a responsible and long-term investor globally. It is unnecessary to worry about China's development.

Ties with Russia

Trade between China and Russia registered an over 20-percent growth year on year in 2017 and there are still untapped potentials in the two countries' business cooperation. Trade now stands at about $80 billion and the two countries can work together to increase it to $100 billion through innovation and untapped potential.

China and Russia are each other's biggest neighbors and a stable bilateral relationship is in the interest of both countries and the world.

Sino-Japanese relations

I will consider paying an official visit to Japan while attending the China-Japan-ROK leaders' meeting in the first half of this year.

There have been signs of improving relations and Japanese Prime Minister Shinzo Abe has invited me to visit Japan on several occasions. China expects Japan to contribute more to the sustained and steady development of bilateral relations. The improvement of bilateral relations requires not just the right atmosphere, but also calls for commitment and vision.

This year marks the 40th anniversary of the signing of the China-Japan Treaty of Peace and Friendship. Both sides should honor the spirit and consensus of the four political documents they have signed since the normalization of diplomatic ties.

While the exchange of visits at the leadership level helps to get the relationship back on track, consolidating the foundation for bilateral relations matters more. Our goal should not be a one-time deal.

Guangdong-HK-Macao development

China will soon unveil and implement a plan for building the Guangdong-Hong Kong-Macao Greater Bay Area to promote regional development. It will be built into a world-class greater bay area because each of the three regions will complement each other with their own unique strengths.

The plan is being formulated and will be made public soon for implementation. It will gradually enable residents in Hong Kong and Macao special administrative regions to enjoy equal access to housing, education and transportation once they live and work on the mainland, especially in Guangdong Province.

While encouraging Hong Kong and Macao to integrate their development plans with that of the mainland, the Central Government will continue to uphold the principles of "one country, two systems," and "Hong Kong people administering Hong Kong" and "Macao people administering Macao" with a high degree of autonomy.

Cross-Taiwan Straits relations

The mainland always works to ensure that people from Taiwan enjoy the same treatment as mainlanders when they come to work, study or live on the mainland. We are one family. The mainland will never tolerate any attempts, propositions or acts for "Taiwan independence." Nor will the mainland tolerate attempts by any external force to use the "Taiwan card" to cause difficulties for cross-Straits relations and the people on both sides.

The mainland is ready to dialogue and consult with all political parties and groups in Taiwan who recognize the 1992 Consensus embodying the one-China principle, to discuss issues that concern the people on both sides.

The mainland is working for peaceful development of cross-Straits relations to eventually achieve peaceful reunification, which represents the fundamental interests of the nation.

Copyedited by Rebeca Toledo

Comments to linan@bjreview.com

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