Premier Li Keqiang  at DAVOS Jan 2015


维护和平稳定 推动结构改革 增强发展新动能
Uphold Peace and Stability, Advance Structural Reform andGenerate New Momentum for Development

– Special Address at the World Economic Forum AnnualMeeting 2015

中华人民共和国国务院总理 李克强
H.E. Li Keqiang, Premier of the State Council of thePeople’s Republic of China

Davos, 21 January 2015


Professor Klaus Schwab,
President Simonetta Sommaruga,
Distinguished Guests,
Ladies and Gentlemen,
Dear Friends,


It gives me great pleasure to come to Davosagain after five years to attend the World Economic Forum Annual Meeting 2015.Davos is a town of peace and serenity, yet the world outside is not tranquil.We need to work together to shape the world in a new global context. I was toldthat Davos used to be a resort for recuperation from lung diseases, and thelater discovery of Penicillin changed that. Now it is a place for people togather and pool their wisdom for “brain-storm”. Personally, I find this morethan relevant, because our world also needs new forms of “Penicillin” to tacklenew challenges that have emerged.


Admittedly, the world today is by no meanstrouble-free. Regional hotspots, local conflicts and terrorist attacks continueto flare up, posing immediate threats to humanity. Global economic recoverylacks speed and momentum. Major economies are performing unevenly. Commodityprices are going through frequent fluctuations. And signs of deflation havemade the situation even worse. In fact, many people are quite pessimistic aboutthe future of the world. They believe that the guarantee of peace is weak, andthe prospect of development is elusive.


A philosopher once observed that we cannotsolve problems by using the same kind of thinking we used when we created them.Indeed, old problems can no longer be solved by clinging to the outdatedmindset of confrontation, hatred and isolation. Dialogue, consultation andcooperation must be explored to find solutions to new problems. It is importantthat we draw lessons from history, and pool our collective wisdom to maximizethe convergence of interests among countries. Fortunately, in time of hardshipand trial, mankind have always been able to find the courage to get out of thepredicament and move ahead through change and innovation.


In a world facing complex internationalsituation, we should all work together to uphold peace and stability. This yearmarks the 70th anniversary of the victory of the world’s anti-Fascist war. Touphold peace and stability serves the interests of all people in the world. Theworld order established after World War II as well as generally recognizednorms governing international relations must be maintained, not overturned.Otherwise, prosperity and development could be jeopardized. The Cold War andzero-sum mentalities must be abandoned. The “winner takes all” approach willnot work. Regional hotspots and geopolitical conflicts must be resolvedpeacefully through political means. Terrorism, in all its manifestations, mustbe opposed. China remains committed to peaceful development and regionalstability. And China has no intention to compete with other countries forsupremacy. Peace in the world must be cherished the same as we cherish oureyes, so that the achievements and benefits of civilization, including reasonand justice, will prevail.


In a world of diverse civilizations, weshould all seek to live in harmony. Cultural diversity, like biodiversity, is amost precious treasure endowed to us on this planet. And human society is likea garden where all human civilizations blossom. Different cultures andreligions need to respect and live in harmony with each other. Whilemaintaining the natural close ties among those with whom we see eye to eye, wealso need to respect those with whom we disagree. Like the vast ocean admittingall rivers that run into it, members of the international community need towork together to expand common ground while accepting differences, and seekwin-win progress through inclusive cooperation and mutual learning.


In a world facing volatile economicsituation, we should all work to promote opening-up and innovation. What hashappened since the outbreak of the international financial crisis seven yearsago proves that to work in unity is the surest way for countries to get overthe difficulties. We are all interdependent in this world. While we each havethe right to adopt economic policies in line with national conditions, we needto strengthen macro-policy coordination to expand the convergence of interestsand achieve common development. An European proverb says, “when the wind ofchange blows, some build walls, while others build windmills.” We need to actalong the trend of our time, firmly advance free trade, resolutely rejectprotectionism, and actively expand regional economic cooperation. We need tobuild global value chains, and seize the opportunity of a new technologicalrevolution. While the international community agree on the importance ofmacro-policies to the economy, they also recognize the urgency to go ahead withstructural reform. Structural reform must be carried through no matter howdifficult it is, as it is an effective way to foster conditions conducive toglobal innovation and bring about new momentum for global development.


Ladies and Gentlemen,


I know you are all interested in the outlookof the Chinese economy. Some of you may even worry about the possible potentialimpact of China’s economic slowdown and transition. To ease your concerns, letme spend more time today on what is really happening in China.


The Chinese economy has entered a state ofnew normal. The gear of growth is shifting from high speed to medium-to-highspeed, and development needs to move from low-to-medium level to medium-to-highlevel. This has made it all the more necessary for us to press ahead withstructural reform.


It must be noted that the moderation ofgrowth speed in China reflects both profound adjustments in the world economyas well as the law of economics. The Chinese economy is now the second largestin the world. With a larger base figure, a growth even at 7% will produce anannual increase of more than 800 billion US dollars at current price, largerthan a 10% growth five years ago. With the economy performing within thereasonable range and the speed of growth no longer taken as the sole yardstick,the strained supply-demand relationship will be eased, the pressure onresources and the environment will be lowered, and more time and energy will bedevoted to push forward structural reform. That means, the economy will enter amore advanced stage of development, with more sophisticated division of laborand a more optimized structure. If I could compare the Chinese economy to arunning train. What I want you to know is that this train will not lose speedor momentum. It will only be powered by stronger dynamo and run with greatersteadiness, bringing along new opportunities and new momentum of growth.


In 2014, we followed exactly theafore-mentioned approach. In the face of downward pressure, we did not resortto strong stimulus; instead, we vigorously pursued reforms, and the governmentin fact led these reforms by streamlining administration and delegating power.This has motivated both the market and the business sector. GDP grew by 7.4%for the whole year, the best among major economies in the world. Over 13million new jobs were created in cities, with both registered and surveyedunemployment rates lower than the previous year. That is, we achieved growth inemployment despite the economic slowdown. CPI was kept at 2%, lower than thetarget set at the beginning of the year. These outcomes prove that the host ofmacro-regulation measures China adopted have been right and effective. Moreimportantly, new progress has been made in advancing structural reform.


Needless to say, the Chinese economy willcontinue to face substantial downward pressure in 2015. What shall we choose todo under such circumstances? Shall we go for even higher growth for the shortterm, or for medium-to-high growth and a higher quality of development over thelong run? The answer is definitely the latter. We will maintain our strategicfocus and continue to pursue a proactive fiscal policy and a prudent monetarypolicy. We will avoid adopting indiscriminate policies. Instead, we will putmore emphasis on anticipatory adjustment and fine-tuning, do an even better jobwith targeted macro-regulation to keep the economy operating within thereasonable range, and raise the quality and performance of the economy.


We are taking effective measures to fend offdebt, financial and other potential risks. China’s high savings rate, which nowstands at 50%, generates sufficient funds for sustaining economic growth.Besides, China’s local debt, over 70% of which was incurred for infrastructuredevelopment, is backed by assets. And reform of the financial system is makingprogress. What I want to emphasize is that regional or systemic financialcrisis will not happen in China, and the Chinese economy will not head for ahard landing.


It must be pointed out that China is still adeveloping country and still has a long way to go before achievingmodernization. While peace is the basic condition for China’s development,reform and opening-up along with our people’s desire for a happy life constitutethe strongest impetus propelling development. The space of development inChina’s rural and urban areas and various regions is enormous, and thecountry’s domestic demand will simply generate great potential of growth.Development at medium-to-high speed for another ten to twenty years will bringeven bigger changes to China and create more development opportunities for theworld.





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