China Economic Outlook
Chinese Premier Li Keqiang Friday had a deep discussion about the new driving forces in China’s economic transition in Session II of the “1+6” roundtable meeting at Fanghua Villa, Diaoyutai State Guesthouse in Beijing.
The participants are World Bank Group President Jim Yong Kim, IMF Managing Director Christine Lagarde, WTO Director-General Roberto Azevedo, ILO Director-General Guy Ryder, OECD Secretary-General Angel Gurria and FSB Chairman Mark Carney.
Premier Li said that now world economic recovery remains slow and global trade is sluggish.
Meanwhile, the idea of “de-globalization” is emerging, as represented by protectionism and isolationism; geopolitical risks are increasing; and Britain’s exit from the EU has brought new complexities to the world situation. This important roundtable is being held at a time when the world economic development is at a crucial stage. Being the first collective dialogue between the Chinese government and major international economic and financial institutions, the roundtable demonstrates China’s readiness to strengthen communication with the international community. We hope that all sides will have a correct reading of the development trend in the world, put forth good policies to spur world economic growth, and work together to promote economic recovery, stabilize the financial sector and guide market expectations. Premier Li raised the following five proposals at the roundtable:
First, step up macro-economic policy coordination. Under the current situation, all parties need to focus their policies on promoting strong, sustainable and balanced growth, developing the economy and improving people’s lives. It is important to strengthen coordination and make efforts to jointly promote world economic recovery.
Second, strike a balance between addressing the cyclical issues and structural problems, and between short-term and medium-to-long term challenges. We need to expand aggregate demand as appropriate, give priority to structural reform, and implement fiscal and monetary policies that help boost domestic demand and adjust economic structure. We need to ensure that consumption and the service sectors play a bigger role in driving economic growth, develop the new economy, and foster new drivers of growth.
Third, advance global trade and investment liberalization and facilitation. We are now faced with a sluggish global economy and weak global demand. Trade-restrictive measures will only aggravate the situation and slow down global recovery. They will in no way help solve problems or facilitate structural reform. We need to firmly support economic globalization, oppose protectionism in all forms, and uphold the dominant role of the multilateral trading system.
Fourth, promote inclusive growth. We need to promote deregulation, enhance competition and encourage innovation. We need to advance fiscal, financial and labor market reforms, improve infrastructure, and create more and better jobs. Implementation of the 2030 Agenda for Sustainable Development and efforts to promote inclusive growth should become the direction and important driving force for world economic recovery.
Fifth, give better play to the role of the financial sector in supporting economic recovery. We need to strengthen macro-prudential regulation, improve supervision of cross-border capital flows, and prevent systemic financial risks. We also need to strengthen coordination and stabilize expectation in the financial sector, so as to create an enabling environment for economic recovery.
Leaders of major international economic and financial institutions spoke highly of China’s economic growth, which they believed played an active role in facilitating world economic recovery. They pointed out that given the uncertainties in the world economy and increasing risks and challenges, all parties need to have closer macro-economic policy coordination, strengthen infrastructure development, and increase investment in human resources. Efforts must also be made to promote multilateral trade, improve the global financial system, and support the development of innovative, low-carbon and inclusive economy. Thus, a joint and positive signal will be sent of promoting growth through cooperation.