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Factbox: China comment: finmin rules out big stimulus
July 17, 2013 / 10:13 AM / in 4 years

Factbox: China comment: finmin rules out big stimulus

BEIJING (Reuters) - China’s new leaders have promised to keep the economy on an even keel in 2013 with flexible policy settings while accelerating free-market reforms to sustain long-term growth.

Beijing would tolerate quarterly growth slipping as far as 7 percent year-on-year before looking to lift the economy, according to government economists from top think-tanks. The government is projecting growth this year of 7.5 percent.

Below are recent comments on the economy from top government leaders and other senior figures.

LOU JIWEI, FINANCE MINISTER

“China will not conduct large scale fiscal stimulus this year. We will fine-tune some policies to support economic growth and employment on the premise of keeping the size of fiscal deficit unchanged.”

“We will mainly take measures to support economic growth and employment while putting more energies to push forward the next round of reform.”

“We will keep the size of the fiscal deficit unchanged (this year) but will adjust it structurally. The central government will cut expenditures by 5 percent.”

“We will unveil some tax reduction policies, especially for small-sized firms, to better increase employment.”

“We will adjust the expenditure responsibilities of central and local government and increase central government’s spending appropriately.”

“China will expand the value-added tax reform program to the whole service industry.” (Lou made the comments during the U.S.-China Strategic and Economic Dialogue in Washington.) Source: The website of the Ministry of Finance, July 17

LI KEQIANG, PREMIER

“Neither should we change policy orientation due to temporary economic fluctuations, which may affect the hard-won restructuring opportunity, nor should we lack vigilance and preparations when the economy might slide below the reasonable range,”

“We are confident, having the necessary means and the ability (to achieve this year’s growth targets).But we need to pay a lot of efforts.”

“When the economy operates within reasonable range, we will focus on transforming of the mode of economic development.”

“The macroeconomic policies will focus on stabilizing economic growth or guarding the inflation when the economic growth near upper or lower limits.”

Source: the central government website, July 16

LI KEQIANG, PREMIER

“China’s economic situation is generally stable so far this year with main economic indicators within reasonable range and annual expectations.”

“But the economic environment is becoming more complicated and faces favorable and adverse conditions, while the economy still has growth momentum and faces downward pressure.”

“We are at a stage where we must rely on economic transformation and upgrading to keep sustainable and healthy (economic) development.”

“Reform will get rid of obstacles from the structure and mechanisms and inject new momentum for stabilizing and restructuring the economy.”

“Macro-economic control should be based on present conditions and with an eye to the future to ensure the economic growth rate and employment levels do not slide below lower limits and consumer prices do not surpass the upper limit.”

“We will quicken reforms in key areas including administrative management, the fiscal system, finance and prices.”

(Li made the comments during a trip to southern Guangxi Province.)

Source: Xinhua, July 9;

XI JINPING, PRESIDENT

“We should improve our way of evaluating officials’ performance. We should not only look at (economic) development but also fundamentals, not only at obvious achievements but also at potential results.”

“We will include indicators including welfare improvements, social development and ecological benefits as important measures in evaluating officials. We should no longer evaluate performance of officials simply against GDP growth.”

(Xi made the comments in a national party meeting on personnel and organization issues)

Source: Xinhua, June 29;

LIU SHIYU, DEPUTY CENTRAL BANK GOVERNOR

“I am worried that the ‘shadow banking’ capital may flow into the property market, outdated industries and some local government financing vehicles with poor qualifications, which might lead to relatively high risks.”

“We must develop a system of small- and medium-sized banks mainly invested by private investors ... and we should unswervingly push forward market-oriented reforms of interest rate and exchange rate (regimes).”

“Personally, I think we could complete the two reforms naturally over the next 10 years if we the international financial crisis won’t take a turn for the worse.”

“We can also complete the reform on renminbi (yuan) convertibility under the capital account and the use of yuan in cross-border trade over the next 10 years if there is no big changes in the international market.”

Source:Sina.com, March 18

Reporting by China Economics Team; Editing by Sanjeev Miglani

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