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

2. Premier Wen Answers Questions at the Opening Ceremony and at a Meeting with Entrepreneurs

161 PREMIER WEN ANSWERS QUESTIONS AT THE OPENING CEREMONY AND AT A MEETING WITH ENTREPRENEURS (13 September 2010, Tianjin) On 13 September 2010, Premier Wen Jiabao attended the opening ceremony of the fourth Summer Davos Forum and met with entrepreneurs. He answered questions from Klaus Schwab, Executive Chairman of the World Economic Forum, and business representatives . Q: China’s GDP grew by 9.2 percent in 2009 and by 11.2 percent in the first half of this year. China has become one of the fastest growing economies in the world. But some people say there is a gap between the growth rate of the Chinese economy and in the improvement of the people’s living standards. What is your view about this? How can the wealth created by China’s GDP growth better benefit the people? Wen Jiabao: The Chinese government is certainly concerned about the question that you asked. First of all, we should recognize that the people’s lives are being MeetingTheChallengesEN_FA02_17Dec2013.indd 161 MeetingTheChallengesEN_FA02_17Dec2013.indd 161 19/12/13 11:26 AM 19/12/13 11:26 AM MEETING THE CHALLENGES 162 improved gradually with the growth of the Chinese economy. From 2007 to 2009, the actual annual wage income of workers had increased by nearly twelve percent, two percentage points higher than the GDP growth rate. Urban per capital disposable income increased by 9.1 percent and rural per capita net income grew by 8.3 percent per annum. The improvements of people’s lives are obvious to all. In addition to the wage income, the secondary distribution of income, or our fiscal expenditures on social security, culture, education, and healthcare for the people is scheduled to reach 800 billion yuan this year. Second, we must clearly realize that China is still a developing country and we are still at a special stage of development. Therefore, we should follow the principle of “subsistence first and development second.” What we are doing today aims at improving people’s lives tomorrow. It is completely necessary to increase some inputs in this regard. Third, we must carefully solve the problem of social fairness and justice or, to put it in another way, to gradually increase two “proportions .” The first is to increase the proportion of labor remuneration in the primary distribution and the second is to raise the proportion of residents’ income in the national income. These two proportions reflect social fairness and justice. We should not only make the “cake” big but we should also distribute the “cake” fairly. A serious problem that we currently face now is the unfair distribution of income in society. Some people have excessive incomes whereas a large number of people are still living under the poverty line. We must take strong measures, including fiscal and tax reforms as well as income distribution reform to change the unfair income distribution step by step. This serves as an important basis for promoting social fairness and justice and maintaining social stability. MeetingTheChallengesEN_FA02_17Dec2013.indd 162 MeetingTheChallengesEN_FA02_17Dec2013.indd 162 19/12/13 11:26 AM 19/12/13 11:26 AM 2010 SUMMER DAVOS FORUM 163 No one can deny the huge changes in the lives of the Chinese people that have taken place over more than thirty years since reform and opening-up. We have lifted more than 200 million of the population out of poverty.1 But we cannot deny the relatively serious problem of the gap between the rich and the poor despite a general improvement of the people’s livelihood. If wealth is controlled in the hands of the minority, the majority will unavoidably become poor, which will lead to social instability. We must keep a clear mind about this. Our ultimate target of economic development is to enhance the material and cultural living standards of the entire Chinese population . This is also the responsibility of the government. Narrowing the distribution gap and achieving social fairness and justice are a reflection of the conscience of the government. Q: Over the past of more than 30 years, the Chinese government successfully created the model of driving economic growth by “made in China.” In the future, China might need to develop a new economic growth model based on “created by China” and “served by China.” Could you elaborate your views about the development of this new economic development model? Wen Jiabao: You have pointed out a key issue in changing the growth...