Chinese VP proposes way forward for world economy at Davos

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Chinese Vice Premier Li Keqiang delivers a speech in the annual meeting of the World Economic Forum (WEF) in Davos, Switzerland, Jan. 28, 2010. [Xinhua]

Chinese Vice Premier Li Keqiang on Thursday outlined China's response to the economic crisis and its follow-up policies and put forward proposals for global recovery.

In a keynote speech delivered at the annual meeting of the World Economic Forum (WEF) in the eastern Swiss ski resort of Davos, Li said the theme of the meeting, "Rethink, Redesign, Rebuild", embodied the spirit of cooperation and innovation in discussing world economic development in the post-crisis era.

Detailing China's response to the crisis, Li said it was resolute decisions and timely measures taken by the central government that helped China post an overall growth of 8.7 percent last year during the global economic crisis.

"With an increase of 380 billion dollars in gross domestic product (GDP), China's contribution to world economic recovery is obvious," he said. "To effectively cope with the crisis, we increased public spending by a large margin and carried out structural tax cuts."

In the fourth quarter of 2009, China's central government revenue, household income and profits of businesses all increased in tandem with GDP growth, Li said.

The vice-premier said it should be stressed that, despite the international financial crisis, the fundamentals and long-term positive trend of China's economic development remained unchanged.

"As we stand at a new historical juncture, we must change the old way of inefficient growth and transform the current development model that is excessively reliant on investment and exports," Li said.

China would transform its current growth pattern and explore a new development model in the post-crisis era, he said.

The vice-premier said China's future direction had three aspects: a focus on boosting domestic demand to drive economic growth; reliance on technological innovation, energy conservation and emissions reductions to promote industrial restructuring and upgrading; deeper reforms and more opening up to the world.

To promote world economic recovery and sustained development in the post-crisis era, Li laid out a five-point proposal.

"First, we should continue to work together and prevail over the crisis. The policies of one country can well impact those of others. Only when global economic recovery is achieved can the recovery of national economies be secured," he said.

"Second, we should promote a more open market," Li said, adding that this was the only way forward in the continued response to the crisis. Opening-up could be both bilateral and multilateral. Trade protectionist practices would only exacerbate the economic crisis, slow down the recovery process and ultimately harm the interests of the very countries who applied such measures.

"Third, we should promote balanced development of the world," said the Chinese vice premier. Only by helping developing countries out of economic backwardness could the world ensure enough food and clothing for their people and poverty was reduced. And only by tapping the potential demand of developing countries could the global market be expanded and unemployment around the world reduced.

"Fourth, we should jointly tackle major challenges," he said. This was an urgent task to ensure sound recovery and sustained development of the world economy. The international community ought to coordinate actions to meet the challenges.

"Fifth, we should improve the structure of global governance," Li said. The world needed not only more consensus and actions but reliable institutional guarantees, i it was to overcome the crisis, open up markets, promote balanced development and address major challenges.

Li said he was confident that, as long as the international community pursued development in a spirit of cooperation and built a common future with inclusiveness, the world economy would embark on a path of sound recovery and sustained development.