Premier Li Keqiang's press conference after the closing meeting of the fourth session of the 12th National People's Congress on March 16 in Beijing (WANG XIANG/BEIJING REVIEW) 

Premier Li Keqiang's press conference on the final day of the Lianghui is usually something to be closely watched.

This year proved to be of particular importance, given the passage of the final draft of China's 13th Five-Year Plan (2016-20), as well as major policy initiatives and legislation ranging from major economic targets to supply-side structural reform to a new charity law.

The answers that Premier Li gives at the end of the two-week Lianghui shape the language of public discourse over the next year.

Prior to this year's Lianghui, Premier Li reiterated that cabinet ministers and heads of the Central Government's departments should actively respond to media and public enquiries and be willing to share more of their thoughts on key policy issues.

The Premier is a man of his word, leading by example by answering an average of 40 questions in his annual post-Lianghui press conference since he became Premier in 2013.

Why the press conference matters

Since 1988, Chinese premiers have held press conferences at the end of the annual Lianghui sessions.

Premiers use the press conference as a venue to "fill-in-the-blanks" on activities in the Two Sessions by answering questions that expand upon policy and legislative initiatives that were considered and/or ratified by the Lianghui.

Often the press conference gives hints as to future policy or legislative proposals. This one was no different, as Premier Li emphasized the importance that the Five-Year Plan will play in pursuing reform, economic policy issues, societal development, and the steps necessary in order to achieve the "decisive push" to create a moderately prosperous society.

The word that might best describe the Premier's annual Lianghui press conference is "expectations" – expectations about the state of the nation, economic development, political and government reform, and where the government intends to go in the next year.

The 2016 version of the Premier's press conference was no different in this respect. How will the government take China forward? What answers will the Premier give to meaningful questions? How will the country move forward economically and socially during the next year?

Highlights of the press conference

While Premier Li's work report at the opening of the National People's Congress is important, the observations made by the Premier at the post-Lianghui press conference can resonate for months after the event. Contrary to the beliefs of some, the annual post-Lianghui press conference is not some purposeless political exercise. Rather, it provides insight into the government leadership's thinking for the next year and beyond.

Speaking to both foreign and domestic reporters in the Great Hall of the People, Premier Li gave a clear and honest assessment on China's fundamentals. In a nearly two and a half hour press conference, Premier Li focused on the economy, the people's livelihood, and foreign policy.

After the Premier's opening statement, he attempted to lay out the government's plan to offer financial support for the real economy and small businesses amid China's economic slowdown concerns.

- Economic issues

"Moral hazards sharpen our vision for most effective regulation."

Premier Li emphasized China's intent to strengthen regulatory market measures and reiterated his reform narrative and pledged to create a full-fledged regulatory regime.

Noting that there were major challenges in financial markets, the Premier emphasized China's pro-growth measures that have been put in place thus far, including cuts in interest rates, which he cautioned should not be labelled as quantitative easing. The Premier noted that the country's growth was on track and that "It's impossible for me to (agree) that China is unable to meet the decided target." Specifically, he stated that China is in a good position to defuse financial risks and that the economy will not suffer hard landing.

Premier Li offered reassurances that the Chinese economy was safe and sound, and that Beijing had learned from last year's stock market tumultand exchange-rate missteps.

He stated that while China's economy faces difficulties, there's also hope – much more hope than difficulties by stating "Hardship and hope coexist in the Chinese economy, with more hope than hardship." The Premier made it a point to emphasize that "China will not suffer a hard economic landing." Premier Li granted that while the Chinese economy faces a daunting challenge of restructuring, the economy as a whole "has great potential."

The Premier noted that inappropriate government control was hindering economic growth. He stated with confidence that while the non-performing loan ratio of Chinese banks had risen during 2015, China was "in a good position to defuse the risks." The Premier also remarked that the Chinese economy generated 13 million new urban jobs in 2015 and that the service sector expanded at 8.1 percent in first two months of 2016.

Of particular interest was the Premier's discussion of the importance of tax reform, the upgrading of traditional growth drivers, and an observation that urbanization is a major growth driver for China, both now and in the future. Premier Li noted, "There's a lot of room to boost both industrialization and urbanization."

The Premier stated that reforms can unleash revived growth and job creation, noting that "We will employ innovation to maintain steady economic performance. We must achieve win-win by striking a balance between cutting industrial capacity, spurring development and stable employment."

The Premier was asked how China's economic slowdown will affect the global economy. Premier Li noted that China is transitioning, that deep-seeded problems have become more acute and must be solved.

- China-U.S. relations

"China will stick to its path of peaceful development."

Premier Li noted that China was the United States' largest trading partner in 2015, which reached $560 billion. The Premier observed that "Bilateral common interests between China and the U.S. are bigger than disputes."

The quote that caught the attention of most American media outlets was the Premier's observation that "the result of the lively U.S. presidential election will not affect China-U.S. relations." The Premier touched upon China-U.S. BIT negotiations, noting that they should proceed on basis of mutual benefits.

An interesting question was posed to the Premier in which he was asked about American President Obama's focus on the Asia-Pacific region. Was this a problem for China? The Premier responded that this was not a problem and that China was willing to work with the U.S. He elaborated on this by noting that Asia was China's neighborhood and that China and the U.S. can cooperate with each other in the Asia-Pacific, contribute to regional stability, and develop a stable, benign environment in Asia with the cooperation of countries in the region.

- The people's livelihood

"Reform and development are not in conflict."

Premier Li answered a question that is of concern to the average Chinses citizen: Pension benefits issues. Should the government be hands off or on? Premier Li state that "The Central Government will give subsidies to local governments (regarding pensions) if they do their best. China will ensure the payment of pension benefits in the long run."

The Premier noted that instead of economic stimulus measures, China has chosen to engage in structural reforms in order to ensure growth and avoid the financial risk. He noted that this will mean getting a handle on industrial overcapacity by engaging in supply-side reform in order to avoid mass layoffs. Government has financial resources to cover layoffs.

The question of what the government will do to press ahead with reform elicited an interesting response by Premier Li, noting that the government will "further boost productivity and improve government services." Li observed that this improvement will take place through administrative streamlining and the delegation of power, primarily by cutting the items requiring State Council review and approval of administrative procedures, licensing, and permits. The Premier stated that "we are determined to press ahead, even if the government has to make painful adjustments."

The Premier was asked about increasing transparency in government affairs, noting that "Government information openness should be a standard practice. More information needs to be made public if it is in the public interest." Premier Li underscored this point by noting that "Government has the responsibility to explain policy decisions to the general public."

"We'll continue to welcome supervision from the media and general public," he said.

Premier Li also stated that he often hears complaints about medical insurance where people can claim costs away from home village. He noted that the government is working on a solution to the issues of affordability and portability.

- Additional questions, additional answers

"I have confidence in a bright future for Hong Kong."

The Premier was asked about Sino-Russian relations, as well as business and economic cooperation. Premier Li stated that "China-Russia relations will not be affected by external issues" and cooperation between the two nations would not be shaken due to third party pressure.

Cross-Straits relations were also mentioned, with Premier Li noting that "As long as one adheres to the 1992 Consensus, anything can be discussed." The Premier also took time to discuss the fact that there have been some signs of improvement in Sino-Japanese relations, but that they are still quite fragile.

When asked about "what's wrong with Hong Kong," Premier Li stated that Hong Kong had to put in its own efforts to develop. He added that the HKSAR could also take advantage of the Chinese mainland's economic development, stating that "The Central Government will give full support to any proposals from the SAR government that help maintain Hong Kong's long-term prosperity and stability and contribute to the well-being of the people of Hong Kong."

The last question to the Premier regarded agriculture, the countryside, and villagers. Premier Li stated that coordination between national new-type urbanization and agricultural reform would accelerate during the 13th Five-Year Plan, fulfilling the pledge to improve the lives of citizens living in rural areas.

Ultimately, Premier Li Keqiang's post-Lianghui press conference had two goals: to press forward with a discussion needed reform policies and to reassure Chinese citizens that their government is working hard to meet its financial commitments despite economic disruptions. He was successful in achieving both of these goals.

The author is a Professor of Political Science at the University of St. Thomas in Houston

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