Premier's reform focus demands appreciation

Premier Li Keqiang has rarely passed a strong remark or taken an aggressive step to boost the economy despite the first slowdown in economic growth in more than a quarter of a century, and this is exactly the type of prudence the market needs now. Amid mounting expectations of broader policy easing, such as cuts in the interest rate and bank reserve requirement, the premier has pushed for deeper economic reforms, instead of a large stimulus.

Li and his colleagues have vowed to make investment in China easier by reducing red tape and widening access to restricted sectors, for both domestic and overseas capital. The weekly meeting of the State Council, China's Cabinet, on Nov 5 focused on reforms and pledged to revise some laws to do away with the precondition for government approval for investment, unless they were absolutely necessary.

This is the most radical step the premier has taken to reduce government intervention in the investment market and also a major step in creating an open market after the country's top economic planning body proposed on Nov 4 to significantly slash the number of sectors off limits to foreign investors. Such changes, in line with the reforms Li has been painstakingly pushing for during his 20 months in office, are expected to make it easier for investors to do business in China in the long run.