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[DAVOS] Chinese Premier Li Keqiang said on Wednesday that China's slowing economy reflected the broader, global situation and promised that he would forge ahead with major reforms to boost growth prospects.
Li told the World Economic Forum in Davos, Switzerland, that China, hurt by a housing slump and waning investment and manufacturing growth, would continue to face headwinds in 2015.
China, the world's second largest economy, announced on Monday that growth slowed to 7.4 per cent in 2014 from 7.7 per cent in 2013, with fourth-quarter expansion put at 7.3 per cent - slightly higher than markets had expected. "The Chinese economy will face downward pressures in 2015," Li said, adding that it was not heading "for a hard landing". "China's economy has entered a period of new normal," he said. "The new situation has made structural reform all the more necessary. The (economic) adjustment in China reflects the world economy." Among the reforms he listed were the liberalisation of the service sector, protecting intellectual property rights and deepening China's capital markets. "We will move towards the path of reforms. This way we can shift gear without losing momentum and achieve medium- to high-speed growth, and medium- to high-level development".
Beijing would encourage mass entrepreneurship and innovation, he said, which could "offer an endless source of creativity and wealth" and a "goldmine" for the country to tap.
The government should let the market "take a decisive role", he added.
Fiscal policy, taxation, foreign exchange and financial markets will also all be overhauled, the Chinese premier said. "China will continue to move along the path of restructuring with great determination," he said.
He added that China did not intend to compete with other countries for supremacy. Regional hostilities must be resolved by political means, he said.
At last year's meeting in Davos, Japanese Prime Minister Shinzo Abe raised concerns about a potential clash between China and Japan, drawing a parallel at the time with the eve of World War One. But those worries have since eased, with both states seeming determined to keep a firm lid on tensions.