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Premier Li Keqiang Meets the Press: Full Transcript of Questions and Answers

China Daily | Updated: 2020-05-30 09:31
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The Third Session of the 13th National People’s Congress held a press conference at the Great Hall of the People on the afternoon of 28 May 2020. Premier Li Keqiang met with Chinese and foreign reporters and answered their questions at the invitation of Spokesperson Mr. Zhang Yesui.

In his opening remarks, Premier Li Keqiang thanked the journalists for covering China’s NPC and CPPCC Sessions at an unusual time and despite unusual circumstances. He noted that although the containment protocols require that the press conference be held via a video link, such distance would not impede their communication. In the interest of time, he went straight to questions.

Premier Li Keqiang meets the press after the closing of the third session of the 13th National People's Congress at the Great Hall of the People in Beijing, capital of China, May 28, 2020. Premier Li took questions from Chinese and foreign reporters via video link. [Photo/Xinhua]

Reuters: The new coronavirus outbreak has devastated economies around the world. Trillions of dollars in fiscal and monetary measures have been pushed out to deal with the fallout. In this year’s Government Work Report, China did not set a GDP growth target. But it did announce fiscal measures worth about 4% of China’s GDP in 2019 according to our calculations. That’s slightly less than some economists expected after seeing China’s economy contract for the first time in decades in the first quarter. So my question is: can we expect China to deliver more ambitious stimulus in the months to come? Does China have sufficient policy options to deal with a prolonged global pandemic and rising tensions with the United States?

Premier Li: The novel coronavirus disease has taken a heavy toll on the global economy in a way rarely seen before. Major international institutions have projected a negative 3 percent global growth or worse this year. As China’s economy has become deeply integrated into the global economy, it is simply impossible for the Chinese economy to stay immune to such impacts. This year we decided not to set a specific growth target. This is a decision informed by the realities on the ground. In the meantime, we have formulated a series of goals and tasks in six key areas which are closely connected with economic development, with a particular focus on protecting employment, people’s basic living needs, and market entities.

Not setting a specific GDP growth target does not mean that economic development is not important. Our decision is designed for economic growth to deliver more real gains to our people and promote higher quality development in China. We believe that development still holds the key and is the foundation for resolving all the problems in China today. Putting protections in place in six key areas, especially in the areas of jobs, livelihoods and businesses, will help us achieve positive and solid growth this year to the extent possible, and maintain steady economic development.

In your questions you said our measures are seen by some as below expectations. What I heard from many quarters is that our measures are forceful. For any response to work, we must get both the timing and intensity right. When COVID-19 was still raging, some policies were introduced. But with the economy barely reopened, the situation then made it difficult for these policies to get truly delivered on the ground, as most of the people still had to stay indoors. This has been a process of gaining experience. Based on the experience in the past weeks and months and our assessment of the current situation, we have decided on new policy steps of a sizable scale as set out in the Government Work Report, and we believe these measures are forceful.

We have repeatedly said that we will not flood China’s economy with liquidity. We didn’t do it in the past; we will not do it now. But the current unusual time requires extraordinary measures. Just as water is important to fish farming, sufficient liquidity is important to economic development. But too much water will induce froth in the fish pond, whereby some people may attempt to muddy the waters and fish for arbitrage. We must ensure that measures taken are well-focused, the prescription is precise and the medicines for getting out of the hardship effective. New approaches must be employed as to where the money comes from and how it is spent.

The financing raised through policies of a sizable scale can be grouped into mainly two categories. The first covers the increase of fiscal deficits and issuance of government bonds for COVID-19 control. Together it amounts to 2 trillion RMB yuan. The other category, which is roughly twice as big, covers payment relief for enterprises of their contributions to social security schemes, also known as payroll tax in some other countries, and taps into the balance of the unemployment insurance fund, interest concessions made by state-owned commercial banks, and price reductions in natural monopoly industries to lower enterprises’ operating costs. This money will be primarily used to support jobs, people’s basic living needs and businesses, and sustain household income. It accounts for a double-digit share in the more than 40 trillion RMB yuan of total household income in China.

What’s more important is how the money is spent. Our measures of a sizable scale are designed to provide vital relief to businesses and revitalize the market. With a particular focus on supporting jobs and people’s livelihoods, our people will have money to spend and consumption will drive market vitality. This is in keeping with market-oriented reform.

Money well-spent can create new money. Money invested in the people will generate new wealth, help us protect and preserve the tax base and make public finance more sustainable. We will do our utmost to keep China’s economic growth stable and make steady progress. In other words, we will not kick up dirt and leave a trail of dust that will block the sight of those who follow. We have also reserved policy space on the fiscal, financial, social security and other fronts. And we are in a strong position to quickly introduce new measures without any hesitation should the evolving situation calls for it. It is essential that we keep China’s economic growth on a steady course.

I am confident that under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core and with joint efforts of people across the nation, we will be able to prevail over the current difficulties, fulfill our tasks and goals for the whole year, and complete the building of a moderately prosperous society in all respects. Keeping China’s economic growth and fundamentals stable will be a contribution to the whole world. And China will remain a positive force driving global economic recovery and growth.

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