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Tuesday, June 28, 2016, 16:13

Premier Li promises financial market stability

By Xinhua

Premier Li promises financial market stability
Chinese Premier Li Keqiang delivers a speech at the 2016 Summer Davos Forum opening ceremony on June 27 at Tianjin Meijiang Convention and Exhibition Centre. (Photo / Xinhua)

TIANJIN - China will take measures to keep its domestic financial market stable and avoid wild fluctuations, Chinese Premier Li Keqiang said Tuesday.

"Like the Chinese economy, China's capital market will unavoidably see some short-term fluctuations in some fields, but we have to guard against wild swings like skyrocketing rises or precipitous falls," Li said during a session with business executives at a meeting of the World Economic Forum from Sunday to Tuesday.

China's efforts to maintain financial and capital market stability will also contribute to the sound growth of the global economy, Li said, adding that China will also develop its capital market gradually via financial reforms.

Li said the UK's decision to leave the European Union had spilled over into the global financial market, and the world should work together to reduce market panic and maintain market stability.

The high debt levels of Chinese enterprises is a result of China's high savings ratio, and the government is encouraging debt restructuring, bankruptcy and mergers to deleverage, Li said.

The profits of China's major industrial firms rose 6.4 percent year on year in the first five months of this year, indicating room for improved performance via deleveraging, Li added.

Manufacturing

China is committed to transforming its manufacturing sector by leveraging the latest technology to meet diverse demands, Li said at the session.

"Manufacturing is the foundation of China's development and the key for China's manufacturing sector is to move up the value chain," Li said.

Manufacturing will have to become "smarter," relying on technology such as the Internet, cloud computing and big data, and the sector must adjust to changes in market demands, like customization, he said.

Tailoring products and services will help companies appeal to China's swelling middle classes, according to the premier.

Redeployment

The development of new business models in China will help with reemployment of steel workers and coal miners made redundant in the country's trimming of overcapacity in those sectors, according to Premier Li Keqiang.

"The new economy and new business models are creating more jobs than we expected," said Li, when meeting with business leaders on the sidelines of the Annual Meeting of the New Champions 2016 in Tianjin, also known as the Summer Davos, on Tuesday.

The Chinese government has been encouraging business startups, especially in technology, and has welcomed development of the sharing economy. There is also a drive to promote tourism in rural areas.

China is aiming to cut 100 million to 150 million tonnes of steel capacity and 800 million tonnes of coal capacity in a few years, Li said.

"The reduction will involve nearly two million people," according to the premier.

The central government has earmarked 100 billion yuan (about US$15 billion) to help laid-off workers. It has asked local governments to provide funding as well.

Li vowed to cut excess capacity in "a market-oriented and lawful" manner, instead of using administrative orders.

F oreign investment

China will expand market access for foreign investment to help drive industrial upgrades and economic transition, Premier Li Keqiang said at the session.

"The participation of foreign firms is needed in China's efforts to push economic transition and upgrading through reform and innovation to realize sustainable healthy growth," Li said.

Foreign technology and managerial expertise will help Chinese firms and the country's industrial upgrading, he said.

The premier promised to further ease market access for foreign investment to build an environment for fair competition. "China has the biggest potential for investment and should become the world's most appealing destination for investment."

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