China will contribute to solving global challenges

Premier assures world leaders at Davos of country's readiness for world stage, Li Yang reports.

It will take more effective cooperation among countries to tackle the mounting challenges for all people, and more painful reforms are needed to stoke weak global recovery, China's premier said this week in Switzerland.

As always, he added, China will make constructive contributions to both endeavors by deepening its reform at home and expanding its opening up to the world.

Li Keqiang conveyed those two messages to more than 2,500 business leaders and government officials from major economies in his opening speech at the annual meeting of the World Economic Forum in Davos in Switzerland on Wednesday.

With this year's theme of "the new global context", the winter Davos forum is increasingly becoming a platform for world leaders to discuss solutions to many global problems far beyond the economic realm.

China's rise in economic power and its ambition to play a bigger role in the world as a major country with global responsibility put it in the spotlight at the event.

China announced one day before the opening of the Davos forum that its economy grew 7.4 percent last year.

Although that was the lowest growth in 24 years, China has maintained a stable transformation of its economy, politics and society through an overhaul of its reforms.

More than 13 million new jobs were created and the disposable income of China's citizens grew 8 percent, faster than its economic growth.

Fluctuations in industry, trade and investment were kept within a reasonable range and innovation and consumption growth gained speed.

China increased its productivity in the late 1970s by granting farmers' freedom in farming and conducting business in the cities.

It is time to stimulate the innovative potential of the 1.3 billion Chinese nationals, among whom 900 million are laborers and 70 million are private business owners, with new market reforms, Li said.

The Chinese economy has not let the world down but contributed nearly 28 percent of the global economic growth rate last year, and is expected to remain the largest growth contributor this year.

Annual GDP growth of the Chinese economy would reach more than $800 billion at a 7 percent growth rate, markedly larger than five years ago, when China maintained double-digit growth, Li said.

China replaced Japan as the world's second-largest economy in 2010 and its economy last year was already almost twice that of Japan.

The world is expecting "solutions" from China, and China is willing to contribute to help resolve some global issues, and share the fruits of its development with the world, Xinhua reported before the Davos meeting.

"We insist on the harmonious coexistence of different cultures and religions. Cultural diversity is as valuable a natural treasure as the bio-diversity that must be cherished and protected," Li said.

China has been an active advocate of and participant in promoting global governance for a fairer and more inclusive international order, and coordinating global efforts for economic transformation.

Davos, the venue for the forum, used to be a rehabilitation resort for the treatment of pulmonary diseases.

The invention, distribution and use of penicillin in the town helped it restructure and upgrade its economy.

"We need new 'penicillin' to respond to new global challenges," Li said.

The Silk Road Economic Belt and 21st Century Maritime Silk Road initiatives, the Asian Infrastructure Investment Bank, and the Silk Road foundation, all proposed and supported by China, will greatly contribute to global infrastructure construction.

The BRICS Development Bank and emergency reserve mechanism developed with China's full support are effective supplements for the international financial system.

China has called for the developed and developing countries to increase their investment on infrastructure construction, to not only boost the growth of the investor countries, but also to stimulate exports for other countries.

The developed countries need structural reform to recover from the financial crisis, Li has said previously.

But such reform meets considerable political resistance, as it can suppress consumption and expand unemployment.

Some conventional solutions, for example depreciating currency and implementing assistance plans, are of no use to overcome that crisis, said Justin Yifu Lin, an economist from Peking University.

The infrastructure of developed countries needs renovation and improvement, and that of developing countries is mostly poor, he added.

The economist said it is more advisable to invest the developed countries' pension funds and the foreign exchange reserves accumulated by China and the oil exporting countries, which is currently mainly spent buying government bonds, on infrastructure construction as the return would be higher.

China is actively pushing the reform of the International Monetary Fund and the progress of the forming of an Asian-Pacific free trade area.

The Asian safety concept and Asian-Pacific Dream are China's contribution to modern international relations, to improve the global governance framework.

"We cannot solve the problem by the way in which it was created. The old problems cannot be solved in the old ways of confrontation and hostility. The new problems should be solved more through cooperation and negotiation," Li said.

China does not intend to overthrow the current international order and system, but to create and develop on the basis of them, so as to reflect the interests and desires of more countries.

With more parties involved, the world will have more opportunities to pursue sustainable development.

China became a capital exporter last year after benefiting from foreign investment for decades.

Li welcomed foreign enterprises to continue to take up new business opportunities in China's opening up of its service sectors of finance, education, cultural industries, medical care and aged nursing.

Li said he hoped foreign countries could create a fair market environment for China's high-speed railways, nuclear power and aviation industries and telecommunication projects to better serve local demands.

Li will have meetings in Switzerland, China's fifth-largest trader in the European Union, after the Davos meeting, seeking more bilateral cooperation in finance, trade, science, the food and drug industries, and the cultural industry.

China expects to learn from Switzerland's financial management to promote its financial reform at home.

(China Daily 01/23/2015 page6)