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Premier Li Keqiang Meets the Press: Full Transcript of Questions and Answers

fmprc.gov.cn | Updated: 2021-03-12 12:05
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NIKKEI: In delivering the Government Work Report, you said the Chinese government would set its GDP growth target for 2021 at above six percent. Many international institutions forecast that China's economy may well grow at about eight percent this year. In the first year of the period covered by the 14th Five-Year Plan, in addition to expanding investment in fixed assets, we are also seeing a risk of an over-heated real estate sector due to excessive liquidity worldwide. Currently the Chinese government is pursuing accommodative fiscal and monetary policies. Mr. Premier, given the aforementioned factors, is there a possibility for China to tighten its macro policies this year? According to estimates by the Japan Center on Economic Research, the size of China's economy will surpass that of the United States in 2028. What is your comment on that?

Premier Li: I have taken note of the much attention paid to China's above six percent of GDP growth target, and the much analysis about it. Some people believe it is positive whereas some say it is below expectation. We would certainly be happy to see robust growth, but we are also keenly aware that the economy has just recovered and there are many incomparable factors this year. What's more, there is also great uncertainty in global economic recovery.

A six percent GDP growth target is not a low target. China's GDP has reached 100 trillion RMB yuan. A six percent growth rate means adding an output of six trillion RMB yuan, which is equivalent to the amount generated by an over eight percent growth rate at the start of the 13th Five-Year Plan period. Moreover, by setting the GDP growth target at above six percent, we have left possibilities open, which means in actual delivery, there may be even faster growth.

A projected target is not something set in stone. It intends to guide expectations. We will further consolidate the foundation of economic recovery, promote high quality development and make our development truly sustainable. This target should also be aligned with what we can accomplish next year and the year after next. We must avert wild swings in economic performance which will de-anchor market expectations.

A growth too fast will not be a steady one. We need a steady pace to sustain China's development. What we hope for such a big economy as China's is sustained and sound growth for the long term.

In the face of unprecedented severe shocks last year, we acted in a prompt, decisive and focused manner. We did not flood China's economy with massive liquidity. The increased fiscal funds totaling two trillion yuan were mostly used to support market entities and people's well-being by making tax and fee cuts and meeting basic living needs.

We devised a new mechanism to directly allocate those funds to primary-level governments, so that such "lifeline support" can reach them in as short as seven days and local governments would have enough fiscal resources for tax and fee cuts and job retention. These measures worked effectively and efficiently.

We did have another option of channeling the funds to big projects or emerging sectors, which we also need. But that would take a lot of time for feasibility study and market demand analysis, probably as many as 200 days before a project is launched. It is way longer than seven days. So we did not go for that option. Because it would be too late when the money could reach market entities; by that time, many companies would have gone bankrupt.

I recall that at last year's press conference, I was asked by a journalist whether the scale and intensity of our policy support was too modest. We believe that for fertilizer to work, it must go all the way to the root of plants. Hence we decided to act where policies were most needed and they proved to be effective and efficient. The scale and intensity were just right so we didn't have to resort to policy instruments in reserve.

We didn't use quantitative easing last year. So this year there is no need for sudden shifts in our policies. We will maintain the consistency and sustainability of the policies with a focus on solidifying the positive momentum of economic rebound. In keeping major economic indicators within an appropriate range, we must continue to support market entities, especially those smaller firms who are just recovering from COVID-19-induced shocks, just as ensuring that fertilizer goes right to the root of plants.

As economic rebound firms, we will make proper adjustments to some policies introduced last year. Some temporary measures may be unwound, but we will introduce new structural tax and fee cut policies to offset the impact of their drawdown. Our support for employment, people's well-being, and market entities will remain undiminished.

How will we keep up the support intensity? The amount of fiscal funds does matter, but what matters more is how the money is used. We will draw upon the good experience gained from macroeconomic regulation last year. In terms of fiscal support, we will make further reductions in central government expenditures. Governments at all levels must live on a tight budget. We will increase the coverage of directly allocated fiscal funds to better support primary-level governments in helping market entities and people in need. In terms of financial support, while maintaining stability in overall leverage ratio, we will continue to encourage financial institutions to make reasonable interest concessions, so that financing will become more accessible and affordable for smaller firms. In the meantime, we will guard against and defuse various types of risks.

The fundamental purpose of China's development is to enable the Chinese people to lead a better life. Our country is still a developing one and there is still a long way to go before we can achieve modernization. We will continue to focus on running our own affairs well. China's development will be a major contribution to world peace, stability, development and prosperity.

China News Service: Mr. Premier, in the past couple of years, we realized the inter-provincial on-the-spot reimbursement of hospitalization bills through individual accounts of basic medical insurance, making access to medical services away from one's hometown much easier. However, that is not yet the case for expenses incurred by seeing a doctor or taking prescription drugs for the many living and working in cities away from their home places, including the elderly people. This means they have to pay the bills upfront and travel back to their hometowns to have the bills settled. When can we realize the inter-provincial on-the-spot reimbursement of outpatient bills?

Premier Li: This is an issue that has been raised by many people in their real-name-based posts on the Chinese government's portal website. When we pass school gates, it is often elderly people that we see who are sending children to school or picking them up. I suppose many of them are out-of-towners who are just in the city to help with caring for their grandchildren. They often face the hassle of traveling back to their hometowns to reimburse their medical expenses. The government is determined to have this problem resolved over time. By the end of this year, we will further expand the coverage of inter-provincial on-the-spot reimbursement of outpatient bills. By the end of next year, every county will have one designated medical institution which will be able to settle on-the-spot inter-provincially outpatient bills and other medical expenses. We should free elderly people from such trouble. Like other similar issues, this may not seem to be a very big thing. Yet if government officials care more and do more on these fronts, they will make life much easier for the elderly people and their families.

Phoenix TV: In the past year, COVID-19 dealt a heavy blow to Hong Kong. In the next couple of years, Hong Kong will enter into an important period of elections. At this year's NPC session, a decision was adopted to improve the electoral system of the Hong Kong Special Administrative Region (SAR). The Standing Committee of the NPC will amend relevant law. There is extensive attention on the future implementation of One Country, Two Systems. How to ensure the steady implementation of One Country, Two Systems in the Hong Kong SAR?

Premier Li: We have made it clear that we will continue to fully and faithfully implement the principle of One Country, Two Systems, under which the people of Hong Kong administer Hong Kong with a high degree of autonomy. We will continue to act in strict accordance with the Constitution and the Basic Law, fully implement the legal system and enforcement mechanisms for safeguarding national security in the Hong Kong SAR, and fully support the SAR government and its Chief Executive in administration according to law.

As for the NPC decision on improving the electoral system of the Hong Kong SAR you asked about, the purpose of the decision is clear-cut: it is to uphold and improve the system and institutions of One Country, Two Systems, uphold the principle of "patriots administering Hong Kong", and ensure steady implementation of One Country, Two Systems.

Last year, Hong Kong suffered multiple disruptions. We hope people from all walks of life in the Hong Kong SAR will work together to defeat the virus at an early date, revive economic growth, improve people's living standards and maintain Hong Kong's long-term prosperity and stability. The Central Government will continue to give Hong Kong full support.

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