A worker welds at a construction site in Yiliang, Yunnan province, February 28, 2015.[Photo/Agencies]

Initiatives aimed at reform, innovation will inject new energy into market, premier says

China will use more policy weapons to achieve its growth targets for the year, said Premier Li Keqiang at a closed-door meeting with a small group of key officials on Friday.

The government will do "whatever can be done" to boost "positive factors for growth", Li said.

The country is facing a lingering slowdown in the manufacturing sector and continued anxiety in the stock market.

At the macroeconomic level, more effective and industry-specific policies will be adopted to offset the downward pressure troubling the country's transitional economy, Li told the officials. He said the government must be sensitive to subtle developments and adaptive in policy implementation, to make sure the economy will achieve its targeted annual growth of around 7 percent.

In addition, the government will introduce more reform and innovation initiatives to inject more energy and creativity into the market, he said.

Regarding the economic work to be done in coming months, Li said the government will stand firm but be prepared to adapt to new developments.

As traditional drivers for growth in China have waned, "it is necessary to provide more public goods and services, and to encourage mass entrepreneurship and innovation to boost the growth momentum," Li was quoted as saying in a circular released on Saturday.

Major economic indicators on fixed-asset investments, imports, exports and value-added industrial output fell short of market expectations in July, signaling a contraction of the economy.

Li said recent world market volatility has added new uncertainties to the global recovery.

Policies involving cuts in the required reserve ratio for banks, interest rates, taxes, fees and measures aimed at stabilizing the market have been issued and are paying off, the circular quoted Li as saying.

Li said that in light of burgeoning consumer demands new policies will be rolled out to unlock consumption potentials and improve living standards through means such as better express deliveries and other logistics services. More global cooperation on production capacity will be encouraged as that will deliver win-win results, he said.

In addition, corporate research and development innovation will be encouraged through extra tax deductions for research and development costs and through revisions to the regulations governing technology businesses. Wider application of green, energy-efficient and low-carbon products will be encouraged, and more sectors will be able to take advantage of the Internet-Plus initiative to foster new growth, Li said.

Li said there is currently no reason to further adjust the value of the yuan, and China is well positioned to defend against regional or systemic risks.

He said it is important to promote financial reform and opening-up and keep a reasonable level of liquidity to better serve the real economy. It is also important to accelerate the creation of institutional solutions and to foster and ensure the sound development of an open, transparent capital market for long-term stability.