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Full text of Premier Wen's speech at 2009 Summer Davos

(Xinhua)
Updated: 2009-09-11 02:35

Ladies and Gentlemen,

The international financial crisis has inflicted far-reaching impact on the world economy, and China's economy has not been immune. To counter the global financial crisis is a long-term and arduous task. Our policies should not only focus on overcoming the short-term difficulties, but also, and more importantly, ensure long-term development. They should seek to bring a fundamental solution to the institutional and structural problems constraining the sound growth of China's economy, boost the internal dynamism of economic growth in an all-round way, and raise the overall quality of economic and social progress and the capacity for sustainable development. This way, we will lay a more solid foundation for building a moderately prosperous society at a higher level to the benefit of the more than one billion population.

We should focus on restructuring the economy, and make greater effort to enhance the role of domestic demand, especially final consumption in spurring growth. To boost domestic demand is a long-term strategic policy for China's economic growth and the way for us to tackle the financial crisis and stave off external risks. We must take forceful measures to adjust the structures of domestic and external demands and strengthen the role of domestic demand in fuelling economic growth. In particular, we must increase the share of consumption in domestic demand, raise urban and rural income, improve consumer expectations, and enhance people's willingness and capacity to spend. We will maintain rational growth of investment, optimize the investment structure, increase investment returns, shut down backward production facilities, encourage corporate merger and reorganization and avert redundant construction. We will speed up the development of the service sector and make it a key link in our restructuring effort, a priority task in boosting domestic demand, and an important factor in promoting balanced growth of supply and demand. Development of the service sector must be pursued in the broader context of adjusting the demand structure, encouraging the growth of the non-public sector of the economy and expanding employment. We will increase the share of the service sector in the GDP on a continuous basis, and put in place a market-based service industry with the participation of multiple service providers.

We should deepen reform and opening-up, the fundamental force in driving development, and make greater effort to build vibrant institutions and mechanisms. Reform and opening-up are essential to strengthening the dynamism and momentum of China's economic growth. Our major tasks in this connection are as follows: deepen the reform of income distribution system, adjust the structure of national income distribution, increase the share of people's income, and narrow the gap in income distribution. We will speed up the establishment of pricing mechanisms for resources and factors of production that are responsive to market changes and reflect the scarcity level of the resources and environmental cost, and push forward the reform in resource products price and environmental protection charge. We will deepen reform of fiscal, taxation and financial systems, upgrade the capital market and banking system, and improve the RMB exchange rate regime. We will unswervingly reinforce and develop the public sector of the economy and encourage, support and guide the development of the non-public sector. While pressing ahead with the comprehensive economic restructuring, we will advance political restructuring in an active and steady way. We will firmly implement the win-win strategy of opening-up and work hard to raise the level of the open economy.

We should see scientific and technological innovation as an important pillar and make greater effort to develop new industries of strategic importance. Science and technology is a powerful engine of economic growth. To overcome the severe international financial crisis, we must rely more on science and technology in making breakthroughs and boosting development. We will make China a country of innovation. We will seek breakthroughs in key technologies that are vital to industrial transformation and upgrading, speed up the development of new industries of strategic importance, and give priority to research, development, and industrial application of technologies in new energy, new materials, bio-medicine, third generation mobile communications, and the integration of telecommunications networks, cable TV networks and the Internet. We will accelerate the development of a low carbon economy and green economy so as to gain an advantageous position in the international industrial competition. We will, at the same time, speed up the upgrading of traditional industries through new and high technologies and advanced applicable technologies and substantially increase the level of modernization in agriculture, manufacturing and the traditional service sector.

We should take it as a strategic priority to pursue balanced development between urban and rural areas and among various regions and promote urbanization, and make greater effort to expand new areas of growth. To balance urban and rural development and development among regions provides a strong internal force that supports China's long-term fast economic growth. This is a primary and also tough task for us as we endeavor to build a moderately prosperous society in all respects. It offers us much leeway in tackling the global financial crisis and represents a great undertaking in the self-improvement of China's economy and society. We must do a good job in work related to agriculture, the rural areas and farmers, and solidify the foundation of agriculture. We will advance urbanization and the building of a new countryside in a coordinated manner. We will take active and steady measures to promote industrialization and urbanization on the basis of balanced consideration of such factors as population density, land use efficiency, industrial development and public services, raise the overall carrying capacity of cities, and open up new space for sustained economic growth. We will continue with our effort to pursue a holistic strategy on regional development and foster new regional growth areas at a faster pace.

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