Dec. 21 (Bloomberg) -- China’s rapid GDP growth must translate into higher income for ordinary people, Vice Premier Li Keqiang said, as the incoming leadership signals a shift in priorities for the world’s second-largest economy.
Li, No. 2 in the Politburo standing committee, said China will lower barriers to private investment and delegate more power to local governments to approve projects, the People’s Daily, the mouthpiece of China’s ruling communist party, reported on its website yesterday. Li was appointed last month and is set to become premier next year.
Li’s comments at a meeting with local officials in Beijing on Dec. 19 came after new leaders said they will seek higher “quality and efficiency” of growth next year. China has set an initial target for 2013 expansion of 7.5 percent, two bank executives and a regulatory official briefed on the matter told Bloomberg earlier this week.
“They are talking about reform quite loudly, and I believe they are serious,” said Shen Jianguang, Hong Kong-based chief Asia economist at Mizuho Securities Asia Ltd. “Li is expected to make changes on many fronts, including relaxing the household registration system and breaking the state monopoly in certain industries.”
China will use more land sale revenue and public housing funds to develop affordable housing in 2013, and will restrict wages in monopoly industries, the Ministry of Finance said in a statement yesterday.
“If our GDP growth does not help income growth of the people, it will be a meaningless exercise no matter how high the rate is,” Li was quoted by the People’s Daily as saying. “It’s not favorable for development, or for stability.”
Li said China must rely on urbanization for sustainable growth, and the government should step back from running businesses.
“What the government has to do is to look after macro issues,” Li said, as cited by the newspaper. “Investment profits or losses in a given area should be left to private investors.”
The State Council, China’s Cabinet, has dispatched teams across the country to ensure local authorities are following the central government’s guidelines for treating private investors fairly, state radio reported yesterday.
To contact the reporter on this story: Xin Zhou in Beijing at email@example.com
To contact the editor responsible for this story: Paul Panckhurst at firstname.lastname@example.org