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Premier Wen answers Qs at Davos Forum

(Xinhua) Updated: 2012-09-12 10:50

Q: In your speech, you gave a full and thorough account of China's economic development with facts and examples. Looking back at the course of China's development in the past ten years, we highly appreciate your devotion of whole heart to the people. Could you tell us how do you personally see China's economic development in the past ten years and what expectations do you have for China's future?

Wen Jiabao: China has traveled an extraordinary journey since reform and opening-up, particularly over the past decade. We have made great achievements, yet we should also recognize the difficulties and challenges.

The major ones include how to sustain steady and fast economic development in the long run; how to further adjust the economic structure and make economic development more innovation-driven; how to narrow the wide income gap and achieve genuine social equity and justice; and how to promote economic transformation and put an end to excessive resources consumption and pollution. These are all problems that we face.

This requires that we press ahead with institutional reform and remove the institutional barriers to our effort in shifting the growth model and adjusting the economic structure. Reform and opening-up remain the driving force for China's economic and social development. This is a bright path. We must keep forging ahead rather than fall back.

In my speech, I stressed that China will still be at a stage of strategic opportunities for its development in a long time to come. This is not an unfounded argument. Our 1.3 billion people generate strong domestic demand; there is still a wide gap between urban and rural areas; the shift of our growth model calls for developing infrastructural facilities related to production and people's livelihood; development of education, culture, science and technology demands substantial input.

All these show that China still enjoys big potential for development. I don't agree with the view that after 30 years of reform and opening-up, China's growth has come to an end. We have set a lower growth rate because we want to focus on shifting the growth model and adjusting the economic structure.

A banker showed me two photos not long ago. One was the subway map of a large foreign city which is as dense as a cobweb and the other was the subway map of Beijing which is quite sparse. If our capital is like this, other Chinese cities could be no better.

I've just come back from the earthquake stricken area of Zhaotong in Yunnan Province. The affected areas bordering Guizhou Province are poor areas inhabited by ethnic minority groups. Their living conditions, traffic facilities and people's lives lag far behind those of the rural and urban areas in eastern China. It will take more than a decade or even decades of hard work for China to achieve all-round development in both urban and rural areas.

Chinese leaders are clear-minded about the situation. We still have a long way to go before we can achieve industrialization, urbanization and agricultural modernization. We still face daunting tasks in terms of improving the lives of urban and rural residents and realizing social equity and justice. We still need to make enormous efforts to achieve green, inclusive and sustainable growth. All these show that China has great potential for development and a vast market. We have full confidence in our development.

Some people have doubted it whether China can resist a downturn when the world economy is on decline. It's true that China's economy is under downward pressure. Yet, we believe that through economic structural adjustment and shift of the growth model and by better harnessing the role of market in resource allocation and earnestly pushing forward reform and opening-up, we are fully capable of sustaining stable economic growth.

We will continue to implement a proactive fiscal policy and a prudent monetary policy, maintain the continuity and stability of our policies and intensify anticipatory adjustments and fine-tuning. I can tell you that none of the measures that we took this year goes beyond the requirement of the budget. They are all within the budget.

We have set a lower growth target this year at 7.5 percent because this is conducive to economic structural adjustment and shift of the growth model. We still have ample fiscal and monetary policy space. Although the growth of fiscal revenues slowed down in the past two months, we still had a surplus of one trillion yuan by the end of July. And the accumulative surplus of the central budget stands at over 100 billion yuan as the stability and adjustment funds. We will use the funds at appropriate times for anticipatory adjustments and fine-tuning to promote stable economic growth.

Different from the situation in 2008 and 2009 of the financial crisis, not all enterprises and industries were sluggish in the first eight months this year. Heavy and chemical industries were in difficulty, while light industries were relatively sound; traditional sectors were in difficulty, while the high-tech industry and service sector were relatively sound; the eastern region was in difficulty, while the central and western regions were relatively sound. Besides, the share of nongovernmental investment continues to grow and exceeded 62 percent in the first eight months of this year.

This shows the structural problems in China's economy and the need to adjust the structure and shift the growth model. It also shows that no country can stay immune from the impact of the world economy. In particular, falling external demand has brought big difficulties to the export-oriented companies.

We must reinforce confidence, place greater importance on stabilizing growth, further promote economic structural adjustment and improve people's livelihood. We are confident that we can achieve the development goals we set for this year. We have confidence in ourselves.

I have devoted 45 years of my life to the service of the country and will retire in a few months. I deeply value the opportunity of coming to the forum and meeting with friends and entrepreneurs around the world.

The World Economic Forum has chosen China because China has the largest population and is a country both old and young. She is old because she has a time-honored history and civilization. She is young because she is on the course of reform and development brimming with energy. In face of the world financial crisis, all countries need to enhance mutual trust and mutual understanding.

I believe the Summer Davos Forum will achieve greater success. In 2007 when the Summer Davos Forum was inaugurated, it took the New Champions as its theme. What are new champions? I think they are the young people, talents, science and technology, and innovation. I fully believe that the World Economic Forum held in China will act as a champion and contribute its share to green, inclusive and sustainable development of the world.

Thank you.

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