Full text of Premier Li’s address at opening ceremony of Summer Davos

We have continued to raise the standards of basic social welfare for our people. China is the world’s biggest developing country. Meeting the basic needs of the over one billion people, such as subsistence, housing, education and medical care, is a huge challenge. Through painstaking efforts, China has put in place three social safety nets covering the entire population, i.e. basic pension, basic medical care and compulsory education. We have made utmost efforts to improve the living and working conditions of the low- and middle-income group, especially people living in poverty, and carried out major projects to improve people’s livelihood, including rural poverty alleviation and rebuilding of run-down areas in cities. As a result of our efforts in the past 30 years and more, over 700 million Chinese have been lifted out of poverty, creating a Chinese miracle in the history of poverty reduction. We are now putting in targeted poverty alleviation efforts with the goal of taking the remaining 40 million rural poor out of poverty by 2020. 

There used to be about 100 million people living in urban run-down areas in China. In the past eight years, we have invested over six trillion yuan in cumulative terms to ensure proper housing for over 80 million people by rebuilding more than 30 million run-down housing units. This is equivalent to housing the whole population of a relatively big country. Inclusive growth has delivered a better and more dignified life to our people and made our economy and society more dynamic and sustainable. That being said, China remains a developing country, and it still has a long way to go before the fruits of development can be shared among all its people and modernization realized.

Ladies and Gentlemen,

The Chinese economy has maintained a momentum of steady and sound growth this year. The first quarter saw 6.9% growth with marked improvement in economic performance, and major economic indicators have continued to move in a positive direction in the second quarter. Power generation, freight volume and new business orders have increased notably. Profits of industrial companies above the designated scale have increased at double-digit rates. Foreign exchange reserves have started to grow again, and the RMB exchange rate has been basically stable. In particular, employment has been strong with surveyed unemployment rate for urban areas falling to 4.91% in May, the lowest level in years. Citing the growing strength of new drivers and steady progress in economic rebalancing in China, a number of international organizations and research institutions have recently revised up China's growth forecasts, reflecting optimistic market expectations.

Pleased as we are with solid performance of economic indicators, we feel even more encouraged by valuable changes in our economic structure. In recent years, facing downward pressure, we did not resort to massive, indiscriminate stimulus measures or follow the previous pattern of excessive investment and resource consumption. Instead, we have kept readjusting our economic structure through reform and innovation and secured a major shift from too much reliance on export and investment to generating growth through consumption, the service sector and domestic demand. Last year, consumption became a primary growth driver, contributing 64.6% to economic growth; The added value of the service sector accounted for more than half, or 51.6% of GDP; Current account balance to GDP ratio dropped to 1.8%, showing that domestic demand has become a strong pillar of the economy. These major changes point to the qualitative improvement in the Chinese economy and have made our growth more stable and sustainable.

Having said that, we are also facing significant economic difficulties and challenges, which we are fully prepared to tackle. Given the complex and volatile external environment, short-term and marginal fluctuations of some economic indicators are inevitable at this crucial stage of transformation and upgrading of China's economy, but the overall trajectory of stability and growth will remain unchanged, and we are fully capable of fulfilling this year's main targets and tasks of development. We will stay committed to seeking progress while maintaining stability, accelerate economic transformation and upgrading through supply-side structural reform, and strengthen the internally-driven development.

We will deepen reform across the board and unleash greater dynamism of economic development. Reform will be stepped up in fiscal, taxation, financial, SOEs, state-owned asset and other key areas. Focus will be put on streamlining administration, delegating government powers, and cutting taxes and fees to lower institutional transaction costs and ease burdens on companies. Efforts will be made to expand market access, promote fair competition, provide better services, and remove investment and development barriers for private enterprises. Structural tax reduction policies will be implemented and charges on businesses overhauled. On top of the two trillion yuan worth of cuts in taxes and charges for businesses in previous years, we will introduce a further reduction of one trillion yuan this year, and make sure that market entities can truly feel the benefit of these measures.