Experts, entrepreneurs laud Li's address at WEF
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E-mail Xinhua, January 24, 2015
Chinese Premier Li Keqiang's keynote speech at the annual meeting of the World Economic Forum (WEF) in Davos, Switzerland has been echoed positively by experts and entrepreneurs from around the world.
NEW NORMAL OF ECONOMY
In his speech at the meeting Wednesday, Li pledged that China will deepen its comprehensive reform, open the country wider to foreign investors and continue to promote the liberalization and facilitation of trade and investment.
Noting that the Chinese economy is healthier under a "new normal" featuring positive trends of stable growth, an optimized structure and enhanced quality, Li called on all countries to promote opening up and innovation, oppose protectionism, expand regional economic cooperation, and strengthen international coordination at macro-economic levels.
Commenting on the premier's address, leading European economists have said that China's ongoing economic reforms and initiatives on regional development will benefit both itself and the rest of the world.
During the economic transformation and upgrading, "the only risk for China was stagnation, but this has been overcome," Daniel Gros, director of the Brussels-based Center for European Policy Studies, told Xinhua in an interview, referring to Li's remarks that the Chinese economy, the world's second largest, is not heading for a hard landing.
China's economic reforms benefit the world in two ways, according to Gros, a former economic adviser to the European Commission and then the European Parliament.
"First, everybody benefits if China grows more strongly, especially if growth is re-balanced from investment and exports towards consumption," he said.
"Second, making the market the main determinant of economic decisions also facilitates trade," Gros stressed.
Fredrik Erixon, director of the European Center for International Political Economy (ECIPE), a world-economy think tank based in Brussels, said economic reforms that open up for more competition and innovation are key to China's sustainable development.
"The country could add a new dimension to its global economic leadership by fastening economic reforms that can reverse the country's growth trend," stated the Swedish economist.
Adam Posen, president of Peterson Institute for International Economics, said Li's speech has verified his previous judgement that the slowdown of China's economic growth will not deliver a shock to the country's economy or affect its steady and sound development.
To some extent, the slowdown of the Chinese economy's pace is a good thing, which means the foundation of economic growth will become more solid, he said, predicting that China's economy is not facing a hard landing.
Mark Weinberger, global chairman and CEO of Ernst & Young, said that he has been watching for a long time whether China will gradually transform its economic development model into a more balanced one. China's initiative to deepen its comprehensive economic reform is very necessary and timely, he emphasized.
Ma Yun, founder and chairman of China's e-commerce giant Alibaba, said the new normal of the Chinese economy reflects that China attaches more significance to quality of economic development rather than quantity.
INITIATIVES AND CONFIDENCE
In recent years, China has been eyeing economic upgrading through coordinating its financial and monetary policies and through long-term investment in such areas as infrastructure.
China has also proposed or promoted a host of initiatives, including the Silk Road Economic Zone, the 21st Century Maritime Silk Road, the Development Bank of BRICS (the bloc of the five countries of Brazil, Russia, India, China and South Africa) and the Asian Infrastructure Investment Bank, as part of efforts to fund global public investment and pursue win-win results.
Commenting on these initiatives, Gros said a distinction should be made between internal investment drive and the financing of investment abroad.
"Internal infrastructure investment has been useful to maintain demand and employment in the short run, but it does little to address the domestic demand deficiency," he explained, adding that Chinese efforts to finance global public investment are laudable.
Noting that these initiatives will help push growth, Erixon said that "new investments that are combined with economic reforms have a much better multiplying effect."
Regarding China's trade policies, the ECIPE chief said China's efforts to spur regional trade integration are important and the global market has seen an increasing competitive presence of Chinese companies while countries with a protectionist sentiment towards Chinese are declining in number.
Sergey Gorkov, vice chairman of the board of Russia's Sberbank, told Xinhua that he was excited by Li's remarks. "We have been looking to expand business in China, Premier Li's speech gives us a very strong signal to turn our wishes into reality," he said, "his promise to continuously propel the RMB (the Chinese yuan) internationalization process will create favorable conditions for expanding Russia-China financial cooperation."
Roger Barnett, chairman of the board of U.S. Shaklee Corporation, said that the Chinese premier's speech at the WEF meeting has strengthened his confidence in exploiting the Chinese market via upbeat economic outlook and inspiring structural reform and opening-up resolve.
INNOVATION AND BRICS
Experts also offered their insights on how China can step up its innovation-led growth, as the Chinese government is pushing for more innovation-supporting measures, including encouraging people to start undertakings and promoting the development of the internet economy.
Erixon said that apart from increasing the scope for competition in the economy, China could accelerate its own innovation-led growth by education.
Meanwhile, officials and academics from the BRICS countries said at the WEF annual meeting on Thursday that all five countries' economies have confidence in constant growth during planned structural reforms.
"We continue to invest in all these countries, because we invest not for the next two or three years, but for the next 10 or 15 years," said Carlos Ghosn, chairman and chief executive officer of Renault-Nissan Alliance, at a session debating the economic outlook for BRICS countries.
Ghosn emphasized that despite the adjustments currently taking place in the BRICS countries, they were all capable of strong growth.
Beijing University economics professor Justin Lin said that China would have to depend less on exports and more on domestic consumption and investment, but the government's strong balance sheet and high private savings would facilitate this transition.
"I am confident that China will be able to maintain a 7 percent growth rate over the next five or even 10 years. China will continue to be an engine of world growth," Lin said.
Indian Finance Minister Arun Jaitley said that India intends to return to an 8-9 percent growth rate and that the recent change in government had led to greater clarity.
For Brazil, South Africa and Russia, experts also thought structural reform would bring a positive effect to their growth despite the recent economic slowdown.
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