China vows reforms to cope with global uncertainty

China needs to step up structural reforms to stimulate domestic demand as the global economic recovery remains anaemic, the Xinhua news agency quoted Vice Premier Li Keqiang as saying.

“The global economy is still facing great uncertainties and has not shaken off the deep impact of the financial crisis,” Li was quoted by Xinhua report late on Sunday.

The weak global recovery could overshadow China’s efforts to boost exports while the imbalance of the world economic recovery remained and trade protectionism was on the rise, Li said.

Li warned of the potential damage caused by excessive government debts and loose monetary policies in some countries .

“Some major economies have implemented expansionary monetary policies to stimulate economic recovery, pumping out a huge amount of liquidity which may create turbulences in global financial markets and push up commodity prices,” Li said.

That may in turn fuel hot money inflows into emerging-market economies, he said.

Chinese officials have lashed out at the latest round of quantitative easing by the U.S. Federal Reserve, warning that the move could hurt the global economy and inflate asset bubbles.

The Chinese government would continue to boost domestic demand, consumption in particular, as a long-term strategy to rebalance the economy and sustain growth, Li said.

“The transformation of the economic development mode brooks no delay, and the key for the transformation is to achieve it at an accelerated speed and with practical effects,” he said.

To that end, China would keep an “appropriate growth rate” for investment and encourage private spending, he said.

The government will reduce its intervention in the economy and let market forces play a vital role in resource allocation, while strengthening supervision to prevent financial risks, Li added.
Source: Reuters