Tianjin, China–China will move up the timetable on reforms to spur consumer spending, with an eye toward balancing its trade surplus and moving toward long-term economic stability, Premier Wen Jiabao said Monday.
In his opening address to the summer meeting of the World Economic Forum, Wen spoke about China’s success in weathering the global financial downturn through stimulus spending and other macroeconomic controls. He said that while the country’s $586 billion spending package was necessary, changes are needed to build a stronger economic foundation.
Wen said that although China powered through the economic crisis and helped other countries in the process, the Chinese economy remains unbalanced and laden with problem spots. A key component of balance, he said, is to spur consumer spending in the long term.
“The Chinese market is the one with the largest potential in the world,” said Wen.
China must take advantage of that strength as it “represents an important means to meet the challenges in the economy.”
Wen said measures to encourage spending will include working on the growing income gap, narrowing the rural-urban divide, pushing up personal incomes overall and reforming government-funded social safety nets that will allow consumers more security.
The premier also addressed increasing complaints from international businesses and trade organizations that claim China has grown hostile toward foreign investment. He dismissed the criticism, stating it stemmed from a misunderstanding and lack of clarity in government procurement regulations, and said China has not changed its overall position on foreign investment and competition.
“China is committed to creating an open and fair environment for foreign-invested companies,” said Wen.
While the chorus of complaints has grown louder this year, Wen noted that foreign direct investment in China also continues to increase and the country remains the world’s top destination for foreign investment.