WEF Davos 2016 LIVE: “Chinese economy has great potential, resilience and ample space for policy adjustment”, China’s Vice President Li Yuanchao reassures from Davos

Special Session: Li Yuanchao, Klaus Schwab

DAVOS/SWITZERLAND, 21JAN16 – Li Yuanchao (L), Vice-President of the People’s Republic of China and Klaus Schwab, Founder and Executive Chairman, World Economic Forum captured at the Annual Meeting 2016 of the World Economic Forum in Davos, Switzerland, January 21, 2016. WORLD ECONOMIC FORUM/swiss-image.ch/Photo Monika Flueckiger

On the afternoon of the second day of the World Economic Forum in Davos and amidst a wide worry about the financial turmoil that China’s and the world’s stock markets face, the Vice President of the People’s Republic of China, Mr Li Yuanchao came to the rostrum to give a much anticipated speech.

China’s New Normal

Mr Li started right to the point, stressing the new normal of the Chinese economy that will lead to a steady and more quality oriented growth. “The bright prospects of the Chinese economy do not rely on blind optimism”, China’s top politician underscored. He later continued by stressing that China has marked a substantial growth in 2015 and that his country remains a substantial growth lever for the world. Answering to the critics that Chinese economy is currently losing ground, he argued that “despite volatility, China achieved large growth in the world”.

China’s economy

The 10 trillion dollar economy created 13,2 million jobs and has pushed down unemployment to 5,1% in the big cities, Mr Li revealed to the public in Davos, accentuating the increase in the life standards of the Chinese citizen. Further, consumption in the country is moving up 15,4% and the same goes for retail sales that grew over 30%. Mr Li underlined that high tech industries are contributing more and more to China’s economy. As for China’s imports, valued in 2015 at 1,68 billion US dollars makes still the country the second biggest in the world. The import volume is always on a growth spiral of 4,4%. What is more, Chinese citizens make 120 million overseas visits a year, rendering China a major client in the tourism industry as its residents spend over 1 trillion RMB abroad.

China’s growth

China’s Vice-President made it clear that “China remains a major driving force for global economic growth”. Moreover, China “has the confidence to maintain medium to high growth”, which is its aim in the Chinese new normal era. Continuing to stress the great economic power of China, Mr Li argued that China has managed through its steady impressive growth to double its 2010 GDP and increase substantially its GDP per capita.

The point that he wanted to make was sound and clear. The future of China will be bright with its over 100 million Chinese citizens with college education, something that provides abundant resources to the country to ensure a prosperous future. This is corroborated together with residential savings, which increased to 4 trillion RMB, which provides “a strong basis for boosting consumption and investment”. On a different level, fiscal revenue for China in 2015 is expected to grow more than 5%, or else 3,33 trillion dollars.

“China is committed to reform and will further invigorate market players”, the Chinese top leader stated. The “3rd five year plan” of China is concentrating on this direction, in order to “pursue innovative coordinated grand open and shared development”. “There is a lot we can do and we will do”, Vice-President Li reassured the audience.

Chinese entrepreneurship

One of the big changes taking place lately in China is the substantial endorsement and support of entrepreneurship. He brought then the example of a small Chinese city of 150.000 people that has 100.000 new startups! The startup culture expands in China and every day there are “12.000 newly registered companies”. The limitation of bureaucracy, the strong support to entrepreneurs and the rising number of incubators and accelerators certainly pays off in China’s startup scene today.

Chinese infrastructure

Mr Li did not stop there. He reviewed China’s major infrastructure projects, like the 19.000 km mileage of the great Chinese railway, the biggest in the world. China’s innovation will secure a prosperous and sustainable growth and future. The 4th industrial revolution finds China very well prepared and ready for innovation.

World Crisis

Coming to the world economic crisis, he recognised that “over the past 8 years the world economic recovery has been slow with many urgencies and uncertainties”. According to a Chinese saying, “those that stay vigilant against potential risk and danger, will survice and thrive”, and this is what China is exactly going to do.

Vice-President Li thus gave a consequent glimpse of how China will pursue excellence in the coming 5 years, until 2020: “in the next 5 years China will commit to an open economy… China will continue to advance the initiative… strengthen international cooperation… help developing countries… we will speed up negotiations and FDI.” Later he even stressed that “to ensure some development in China is an important development to the development of mankind”.

G20 in Hangzhou

Finally, as it was anticipated, a significant reference was made to the 11th G20 meeting that will take place on 4-5 September this year in Hangzhou, China. It is the first G20 meeting hosted by China and surely the aims and expectations are high, not only by the world but by China as well. “The G20 plays a significant role in leading and promoting international cooperation”, Vice-President Li echoed President Xi’s adamant belief and saying.

“The Hangzhou summit will focus on innovating growth models, improving global economic governmence, trade and investment… new drivers for the development of the world development”, Mr Li emphasised thereafter.  Furthermore, the aims of the G20 Summit in China will also be to “promote reform and global economic governance… enhance the effectiveness and pay more attention to the developing countries… green finance and energy cooperation at G20”. In addition, he expressed his big hopes that G20 “will promote more trade… against trade protectionism” despite the slowing down of global trade in comparison to global growth as he earlier had noted.

Mr Li chose to close his vibrating speech with an optimistic and wise comment: “Change is the rule of nature…although it is a world of ice and snow out there, in a few months Spring will come back to the mountains!”

The Vice-President of the People’s Republic of China hopes “the new economic Spring for our globe” will come very soon.

Stay tuned from 20 to 23 January as the Sting will be once more producing top class critical LIVE media coverage from the Congress Centre in Davos, Switzerland. 

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