Chinese Premier Li Keqiang said Thursday that the country's economy is facing "a number of difficulties and downward pressure," but expressed confidence it would not experience what he called a "hard landing."
Speaking at the World Economic Forum in Dalian, China, Li cited a slowing worldwide economy as a challenge to China's growth. Still, he said the Chinese economy is "within a reasonable range."
"China's economy is trending well as it slows down in pace toward increasing stability, though not without difficulties, and the general picture shows more opportunities than challenges," Li said.
He also expressed confidence that China will meet its main economic targets this year.
Chinese economy
Concerns about a slowdown in China's economy, the second largest in the world, have rippled across global stock markets in the past few months, with China's own Shanghai Composite Index falling 40 percent since June.
Last month, China unexpectedly allowed the value of its currency to weaken.
Beijing said the move was aimed at making the yuan more market-oriented, but there were concerns it demonstrated the extent to which Chinese leaders are concerned about slowing growth. The move also drew renewed criticism from those who said China was manipulating its currency.
Li said Thursday China would keep exchange rates "stable at a reasonable and balanced level."
"China will assuredly never advocate a currency war," he said. "We speak for international cooperation in production capacity. It's difficult to avoid having competition, but if we cooperate, more so than competing, our mutual benefits will forever be greater than the competition between us."
Fostering innovation
Li also told the forum Thursday that fostering entrepreneurship and innovation is the driving force behind the country’s future growth.
Over the past year and half, Li claimed there has been an average of more than 10,000 new businesses registered each day, helping boost employment, despite the economic slowdown.
Li repeatedly pledged to continue government support including tax breaks, capital injections and cutting red tape to help entrepreneurs.
"With a labor force of 900 million people, talent is the biggest asset [for China’s] creativity and development,” he told audience members.
China’s massive state-owned enterprises have long dominated the country’s economy, but there are signs of increasing interest in private businesses.
According to Global Entrepreneurship Monitor’s 2014 report, 66 percent of the population aged between 18 and 64 in China found entrepreneurship a good career choice while 19 percent of them expected to start a business within three years, up from 14 percent in 2013.
Risky endeavor
However the report also showed that nearly 40 percent of people consider starting businesses a risky endeavor, slightly up from 34 percent in 2013.
Despite the enthusiasm by top officials, critics argue that the government’s top-down economic controls and opaque business cultures pose serious challenges.
“The maker movement’s pursuit of openness is contradictory to the nature of the centralized government’s power control,” said C.Y. Huang, partner of FCC Partners, urging China to first decentralize its controls in areas such as the internet and online freedom.
Huang said the entrepreneurial environment in Shenzhen, along China’s southeastern coast, is much more vibrant and diverse than that in Beijing’s Zhongguancun Science Park, where top-down management still dominates.
Moreover, what’s missing in the movement is the expertise and guidance from seasoned entrepreneurs for new starts-up, which Andy Mok, an entrepreneurial adviser, said is out of the hands of all governments.
“People that have the business knowledge and analytical thinking skills ... to help entrepreneurs are the critical resources. Generally speaking, most government entities whether they are in China, the U.S. or the Europe don’t have that kind of expertise,” said Mok, founder and managing director of Red Pagoda Resources.
Still, what the government can do to help is to pool all related resources together so that they will be available when needed, he said.
Joyce Huang contributed to this report.
