China to Press on with Reform Despite Pain for Some

By Joe Mc Donald & Christopher Bodeen 16 March 2015

BEIJING — Premier Li Keqiang expressed determination Sunday to press ahead with reforms meant to reduce the Chinese government’s role in the world’s second-largest economy in hopes of spurring growth despite what he acknowledged would be pain for “vested interests” that benefit from regulation.

“This is not nail-clipping. This is like taking a knife to one’s own flesh,” Li said at a news conference after the close of China’s annual legislature in Beijing. “But however painful it might be, we are determined to keep going until our job is done.”

During his only news conference of the year, the premier repeated pledges to reduce requirements for government approval of new businesses. He said the number of private businesses being set up has doubled following efforts already underway simplify the process of registering a new enterprise.

Li spoke after Sunday morning’s close of the 11-day session of the ceremonial National People’s Congress. The legislature does little or no lawmaking work but serves as a platform for the ruling Communist Party to highlight proposed reforms and set a tone for the year’s government work.

At this year’s meeting, the government lowered China’s official economic growth to 7 percent from last year’s 7.5 percent and promised to maintain employment levels, fight corruption and curb pollution.

Li acknowledged that reforms face opposition from politically influential state companies that might face tougher competition and officials who might see their own status reduced.

“During the course of reform, vested interests will be upset because the government is cutting its own powers,” he said, adding that China as a whole will benefit. “This reform, by reducing powers held in the hands of government, has actually helped us to tackle the downward pressure on economic growth,” Li said.

The address by Li, 59, afforded him a rare opportunity to emerge from the shadow of the president and Communist Party leader, Xi Jinping, who has established himself as the most powerful Chinese leader since Deng Xiaoping—author of China’s modernization drive in the 1980s.

Although the premier has traditionally overseen the economy and government administration, Xi has absorbed a growing number of portfolios over his first two years in office that have left Li a much diminished figure. Xi has placed himself in charge of policy-making panels on security, the Internet and the economy that do not answer to the NPC, making the legislature less relevant.

Li warned that meeting the lower official growth target will not be easy. He said the ruling party is ready to change its macroeconomic strategies if the rate of new job creation dips too low.

“There is considerable downward pressure on China’s growth and we still face multiple challenges,” the premier said. “When it comes to China’s economy, we must meet both ends of maintaining steady growth and making structural adjustments.”

While expressing cautious confidence in the economy, Li reminded reporters that China ranked behind more than 80 countries in per capita gross domestic product and still had 200 million citizens living in poverty, according to the World Bank.

“So I can say that China is still a developing country in every sense of this term,” Li said.

Also in Li’s work report this year were some targets for battling pollution, a continued emphasis on fighting corruption and a pledge to find jobs for the 7.49 million university students who will graduate this year.

“Enforcement of environmental laws should not be a cotton swab but a killer mace,” Li said, vowing to hold polluting factories liable for excessive emissions while also urging members of China’s society to take part in cleaning up the environment.

“It’s a project in which everyone in the society should take responsibility,” Li said. “If you cannot change the environment you are in, you can modify your behaviors.”

Li’s comments on the environment were in response to a question by a reporter who cited a recent documentary, “Under the Dome,” by a former Chinese TV journalist who documented China’s air woes. It drew more than 200 million views in China before being blocked by censors.

During the annual session that closed Sunday morning, the congress approved a single piece of legislation in the form of amendments intended to modernize and update China’s legislative law that acts as a sort of mini-constitution governing how laws are enacted.

While most of the congress’ legislative business is conducted by its 150-member Standing Committee, the annual full assembly plays a key role in communicating government priorities to the grassroots and ostensibly is aimed at hearing the concerns of legislators who, though not directly elected, are supposed to represent the interests of China’s 1.35 billion citizens.