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China Focus: Chinese economy grows on reform, not stimulus: Premier
2015/09/10

DALIAN, Sept. 10 (Xinhua) -- The Chinese economy has seen increasing reforms, and the government has not printed excessive money or staged massive stimulus despite strong downward pressure, Li said on Thursday.

China contributed around 30 percent to world economic growth during the first half of this year, he said, adding that the world's second largest economy will not take a "hard landing".

Speaking at the opening ceremony of the annual summer meeting of the World Economic Forum in northeastern Dalian city, Li said China's 7 percent growth during the first half of this year was not an easy achievement amid a slowing world economy.

He said a seven percent rise for a 10 trillion dollar economic base is much bigger than the 10 percent growth of a smaller economy in the past, placing China among the world's top major economies.

Li also noted the central government's fiscal deficit, set at 1.12 trillion yuan (175.5 billion U.S. dollars) for this year, is low compared with other major world economies and there is great potential for the country's financial markets.

"China still has a lot of tools to use in its innovative macro-economic adjustment policies and will continue to roll out targeted measures to counter downward pressure," Li said.

MORE CONSUMPTION

A more encouraging sign, according to Li, is that the country's economy is more oriented toward consumption, which accounts for half of China's economic output and 60 percent of growth.

Though economic growth moderated to 7 percent in the first half, retail growth in China has risen more than 10 percent so far this year. Household disposable income has also outstripped economic growth, Li said.

Employment growth exceeded 7.18 million during the first half of this year, or 72 percent of the 10 million target set for the whole year.

"I have repeatedly said that as long as there is adequate employment, a steady rise in incomes and an improving environment, slower or faster growth is acceptable," Li said.

More than 100 million Chinese travelled abroad last year and the number of visitors rose 10 percent in the first six months of this year. Chinese tourists have demonstrated strong purchasing power abroad.

At home, consumption of information, culture, health and tourism services is strong. Energy conservation, environmental protection and the green economy are also emerging to create new growth drivers, according to Li.

NO HARD LANDING

Li also said the Chinese government is capable of dealing with the consequences of growth sliding out of reasonable range and that the Chinese economy will not have a "hard landing".

Despite slower foreign trade value growth, imports of commodities have grown in volume and the country's foreign direct investment will also continue to grow at a fast pace, Li said.

The Chinese economy is changing gears. Its vast manufacturing sector is upgrading and the economy is changing from relying heavily on investment to coordinated growth from both investment and consumption.

Li said fluctuation in growth at a time when the economy is undergoing a painful, difficult transition is normal and should not be a surprise.

"We are making targeted adjustments to the economy to reduce fluctuation in the short term and prevent risk contagions from overflowing." Li said.

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