By Yao Lu
Jul. 13 – Facing increasing pressure from the downturn of the economy, Chinese Premier Wen Jiabao headed two symposiums on China’s current economic situation on July 9 and July 10, claiming to take some real action to boost investor confidence.
“As a developing country, China needs to maintain a certain level of economic growth so as to provide a foundation for the socioeconomic development and improvement of people’s livelihoods,” Wen said.
During his speech, Wen pointed out that the current internal and external economic situations are complicated, but that maintaining stable economic growth is the top priority for China. He noted that this is not only an urgent task at the moment, but also an arduous task over the long term.
Boosting consumption and diversifying exports are among the current policies and measures being implemented to secure stable economic growth. However, the most effective method for now, as Wen suggested, is to promote the reasonable growth of investment. Therefore, greater attention should be drawn to the orientation, structure, quality and efficiency of investment in the country in order to better facilitate scientific development and improvements in standards of living.
Wen further indicated that greater support should be given to the research and development of new technologies and cultivation of newly-emerging industries, as enterprises of this kind are able to maintain exuberant vitality even under great market pressure. Moreover, he suggested combining stable economic development with reforms in certain areas to better accelerate the transformation of the economic development mode, adjust the country’s economic structure, and strengthen the vitality and sustainability of economic development.
Summarizing Wen’s speech, in order to implement the positive fiscal policies, the following measures should be enforced accordingly.
- Focusing on structural tax reduction and the expansion of value-added tax reforms to reduce tax burdens for small and micro-sized firms
- Promoting reforms in key sectors and crucial links to inject new life and energy into social economic development
- Implementing government guidelines to encourage private investment in sectors such as railways, municipal infrastructure, energy, telecommunications, health and education