Business News/ News / World/  China's New Premier vows to reassure private sector

China's new premier, Li Qiang, has addressed the country's private sector, assuring them that conditions for entrepreneurial businesses will improve and that companies will be given equal treatment regardless of their own type.

Li, who was appointed as premier during the annual session of China's parliament on Saturday, is responsible for reviving the country's economy, which has been impacted by COVID-19 for the past three years, as the world's second-largest economy.

Despite his plans to improve the environment for entrepreneurial businesses in China, new premier Li Qiang is faced with several challenges. These include low consumer and private industry confidence, weak demand for exports, and deteriorating relations with the United States.

During his first public appearance at a media conference, the former Communist Party secretary of Shanghai and a trusted associate of President Xi Jinping also stated that the country will implement measures to stimulate employment.

Li, was speaking during the televised session at the Great Hall of the People in central Beijing, “Developing the economy is the fundamental solution for creating jobs."

China's private sector has been left unsettled by a regulatory crackdown that has targeted some of its most dynamic industries, such as private education and the internet.

At the annual parliamentary session's commencement, China announced a GDP growth target of 5%, the lowest goal in almost 30 years, following a mere 3% growth in the economy last year.

Premier Li acknowledged that meeting this target would be a challenging task due to the numerous difficulties China will face this year.

On Monday, Chinese President Xi Jinping emphasized the importance of security in China's development, stating that the country must modernize its military to create a "Great Wall of Steel." 

He called for China to enhance its capacity to safeguard national security and manage public security. This was Xi's first public address since being unanimously confirmed for an unprecedented third term as China's president by the National People's Congress, the country's parliament.

"Security is the foundation for development, stability is the prerequisite for prosperity," Xi said.

In an attempt to tighten party oversight over security matters, the Communist Party of China is anticipated to introduce more stringent regulations, following Xi Jinping's replacement of top security officials with his trusted allies. 

Xi announced that China aims to achieve "common prosperity" by distributing the benefits of development more evenly, a key policy objective that involves encouraging private companies to contribute to reducing the wealth gap.

Xi Jinping stressed the significance of China attaining greater self-reliance and scientific and technological prowess, in response to the US restrictions' on China's access to chip-making equipment and other advanced technologies. 

Xi also emphasized the need to counteract pro-independence and secessionist activities and external intervention concerning Taiwan, a self-governed island that China claims as its territory and a major producer of semiconductors. 

The US-China relationship reached a nadir following the visit of US House Speaker Nancy Pelosi to Taiwan in August 2022, prompting China to conduct unprecedented military exercises around Taiwan and suspend military discussions with Washington.

Li Qiang has acknowledged the challenges faced by the country's slowing economy and the difficulty in achieving the five per cent GDP target for this year. In his first press conference, Li emphasized the need for redoubled efforts to achieve the target and assured the private sector of a better environment and broader space for development.

 However, he also downplayed the importance of GDP growth, stating that most people do not keep their eyes on it all the time.

Li drew on Chinese folklore to demonstrate the country's resilience in the face of difficulties but admitted that the economy faces challenges. Last year, China reported a three per cent GDP, the lowest in decades, and the target of around five per cent for this year is also the lowest in recent years.

 As China is the world's second-largest economy, it remains to be seen how the country will navigate the challenges and work towards achieving its economic goals.

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Updated: 13 Mar 2023, 03:49 PM IST
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