Meeting the Challenges: A Historical Record of China’s Development—Speeches by Wen Jiabao at the World Economic Forum Events

1. Opening Ceremony Speech: Build up in an All-round Way — The Internal Dynamism of China’s Economic Development

97 OPENING CEREMONY SPEECH BUILD UP IN AN ALL-ROUND WAY — THE INTERNAL DYNAMISM OF CHINA’S ECONOMIC DEVELOPMENT (10 September 2009, Dalian) Professor Klaus Schwab, Executive Chairman of the World Economic Forum, Distinguished Guests, Ladies and Gentlemen, Let me begin by extending warm congratulations on the opening of the third Annual Meeting of the New Champions, or the Summer Davos, and a sincere welcome to you all. Over the past year, the world economy has experienced some of its most severe challenges since the Great Depression. We may recall the worries voiced by many people earlier this year when we gathered in Davos for the annual meeting of the World Economic Forum. Since then, due to concerted efforts and active measures by the entire international community, some positive changes have taken place. The world economy is beginning to recover, although the process is slow and tortuous. We can now see the light of dawn on MeetingTheChallengesEN_FA02_17Dec2013.indd 97 MeetingTheChallengesEN_FA02_17Dec2013.indd 97 19/12/13 11:26 AM 19/12/13 11:26 AM MEETING THE CHALLENGES 98 the horizon. This is a critical juncture and it is highly significant that political leaders, entrepreneurs, experts, and scholars from various countries have gathered together here to discuss how to “Relaunch Growth” in the world economy. I sincerely wish this meeting great success! This unprecedented global financial crisis has taken a heavy toll on the Chinese economy. Yet we have risen up to the challenges and dealt with the difficulties with full confidence. And we have achieved initial results in our endeavors. We have arrested the downturn in economic growth. During the first half of this year, China’s GDP grew by 7.5 percent, investment expanded at a faster pace, and consumption maintained rapid and steady growth. Domestic demand played a stronger role in driving the economy forward. From January to July, 6.66 million new urban jobs were created, the income of urban and rural residents increased, and overall social stability was maintained. We effectively managed fiscal and financial risks and kept the budget deficit and government debt at about 3 percent and 20 percent of GDP respectively. The quality of bank assets and the banks’ ability to fend off risks were improved. At the end of June, the ratio of NPLs of the commercial banks was 1.8 percent, down 0.64 percentage points from the beginning of the year, and the capital adequacy ratio stood at 11.1 percent. With the world economy still mired in recession, it has by no means been easy for us to have come this far. The achievements we have made are not something that dropped into our laps. Rather, they are the results of our proactive fiscal policy and moderately easy monetary policy as well as the stimulus package that the Chinese government and people have pursued in line with our national conditions. Some people take a simplistic view and believe that China’s stimulus package consisted only of the four trillion yuan in investment. This is a MeetingTheChallengesEN_FA02_17Dec2013.indd 98 MeetingTheChallengesEN_FA02_17Dec2013.indd 98 19/12/13 11:26 AM 19/12/13 11:26 AM 2009 SUMMER DAVOS FORUM 99 total misunderstanding. China’s stimulus package focuses on expanding domestic demand and is aimed at driving economic growth through both consumption and investment. Of the total four trillion yuan in the two-year investment program, 1.18 trillion yuan will come from the central government , and it will mainly be used to generate greater investments by local governments and the non-public sector. We have made vigorous efforts to stimulate consumption and to make domestic demand, particularly consumer spending, the primary driver of economic growth. We have increased subsidies for farmers, raised the minimum purchasing price of grain, introduced performance-based salaries for primaryand middle-school teachers, and increased the basic cost of living allowances for urban and rural residents so that people will be able to spend more.1 In order to boost consumption, we have offered subsidies in the program to bring home appliances, agricultural machinery, automobiles , and motorcycles to the countryside as well as the program to exchange used automobiles and home appliances for new ones.2 Purchase taxes levied on small-engine and on energy-conserving and environment-friendly cars have been cut by one-half. In the first seven months, a total of 7.31 million cars were sold and total retail sales of...