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

Section 5. 2010 Summer Davos Forum

2 0 1 0 S U M M E R D A V O S F O R U M MeetingTheChallengesEN_FA02_17Dec2013.indd 137 MeetingTheChallengesEN_FA02_17Dec2013.indd 137 19/12/13 11:26 AM 19/12/13 11:26 AM “For a country like China with 1.3 billion people, without a certain rate of economic growth, full employment and the people’s well-being can only be empty talk.” —Wen Jiabao, 2010 MeetingTheChallengesEN_FA02_17Dec2013.indd 138 MeetingTheChallengesEN_FA02_17Dec2013.indd 138 19/12/13 11:26 AM 19/12/13 11:26 AM 139 BACKGROUND Premier Wen Jiabao delivered the following speech at the fourth Summer Davos held during 2010 in Tianjin, China. This was a crucial year during which China exerted continuous efforts to combat the global financial crisis, to maintain steady and fairly rapid economic development, and to accelerate the shifting of the growth model. In 2010, China also sought to achieve the comprehensive objectives of the Eleventh Five-year Plan and to establish a good foundation for the country’s development in the Twelfth Five-year Plan. In the fourth quarter of 2009, China proposed macroeconomic regulation that aimed to maintain a good balance between sustaining steady and fairly rapid economic growth, adjusting the economic structure , and managing inflation expectations. While the global financial crisis appeared to have dampened the pace of China’s economic growth, the real impact of the crisis was to instill an urgent need for changing the model of economic development that China had been following. MeetingTheChallengesEN_FA02_17Dec2013.indd 139 MeetingTheChallengesEN_FA02_17Dec2013.indd 139 19/12/13 11:26 AM 19/12/13 11:26 AM MEETING THE CHALLENGES 140 In 2010, China’s macroeconomic policy contained targeted new problems arising from the operation of the Chinese economy, accelerated reforms of the growth model, improved the quality and efficiency of economic growth, and focused on the generation of endogenously generated growth. The stability of the overall macroeconomic policy was also characterized by a moderately easy monetary policy, a reduction of exceptional macro-regulatory measures applied during times of greater economic instability, and a gradual move towards the adoption of normal measures in an orderly manner. In the same year, on January 18, February 25, and May 10, the People’s Bank of China raised the required reserve ratio by a total of 1.5 percentage points. The bank further resumed the issue of three-year central bank bills in early April and advanced the reform of the RMB exchange rate regime in June. Meanwhile, the Chinese government implemented a series of targeted policies and measures to enhance the management of local government financing platforms, curb the surging housing prices in several cities, meet energy conservation and emission reduction targets of the Eleventh Five-year Plan, waive the requirements for or delegate the power of administrative review and approval for certain project types, promote vegetable production, ensure market supply, and maintain general price stability. In addition, the Chinese government adopted the National Outline for Mediumand Long-term Educational Reform and Development, the National Plan for Developing Functional Zones, and the Decision on Accelerating the Cultivation and Development of Strategic Emerging Industries. The fourth Summer Davos Forum was held two years after the full-scale outbreak of the global financial crisis. The world economy’s gradual recovery reached a critical stage. China’s stimulus package in response to the crisis, a plan that spanned over two years from the end of 2008 to 2010, was drawing to an end. This plan brought about reMeetingTheChallengesEN_FA02_17Dec2013 .indd 140 MeetingTheChallengesEN_FA02_17Dec2013.indd 140 19/12/13 11:26 AM 19/12/13 11:26 AM 2010 SUMMER DAVOS FORUM 141 markable achievements as well as new problems in the operation of the economy. Some observers simply assumed the problems were due to the stimulus package. At the same time, certain foreign-invested enterprises expressed concerns about their future in the Chinese market. Consequently, there was great enthusiasm among forum participants who wanted to hear from Premier Wen about how to look at the international and domestic economic situations, how to evaluate the effectiveness of the stimulus package, and what to expect regarding future policy orientations. In his opening speech, Premier Wen summarized the impact of the stimulus package and made prompt responses that addressed the domestic and international sentiments relating to these and other concerns. He employed numerous facts and data...