China’s Focus to Shift Toward Market, Good Services, Li Says

Premier Li Keqiang reiterated China’s move toward allowing for increased action of market forces, shifting government focus to providing high-quality public services and ensuring social fairness and justice.

China will simplify bureaucratic approval procedures to stabilize economic growth and create more jobs, Li told a national conference yesterday, according to a State Council statement posted on the central government’s website.

In March, Li pledged to open the economy to more market forces and strip power from the government to achieve 7.5 percent annual growth through 2020. He promised to cut bureaucracy and regulations and fight graft, while reducing environmental harm and pollution.

Yesterday’s comments are “much broader, more specific, more pronounced” than those in March, Cheng Li, a China scholar at Washington’s Brookings Institution, wrote in an e-mail. “These measures reflect a major policy move, and could be enormously consequential to China’s private sector and foreign business firms. It may also generate new dynamics and tensions” between central and local governments.

The primary task of the government’s work is creating a sound environment for development, Li said, according to yesterday’s statement. China will make macroeconomic controls more effective, targeted and authoritative, he said.

The government should reduce permits for companies’ production and operation, ordinary investment projects and qualifications, while curbing “blind” expansion of industries with severe overcapacity issues, Li said yesterday.

China will develop medium-sized and small businesses and the service industries, and fight against illegal behavior in the food, environment and safe production areas, Li said.

“Premier Li’s comments suggest that the government continues to push forward with its reform plans,” Mark Williams, senior Asia economist at Capital Economics Ltd. in London, wrote in an an e-mail. Still, yesterday’s statement largely reiterates earlier government comments, Williams said.

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