By Roy Lie A Tjam.
At the conclusion of the 3rd session of the 12th National People’s Congress on March 15 2015, Premier Li Keqiang of China gave a press conference at the Great Hall of the People in Beijing.
Premier Li Keqing started by applauding the approximately 900 foreign- and Chinese journalists. “Friends from the press, ladies and gentlemen, you have made tremendous efforts to cover the NPC and CPPCC sessions. The two sessions have come to a close, but your work has not. Today is Sunday yet you cannot take the day off. I want to use this opportunity to express my sincere appreciation to you all. Now I would be happy to answer your questions”
Here are two extracts from the press conference.
Financial Times:
Last year, China’s real estate market was on the decline. This prompted a large number of Chinese nationals to start buying homes overseas. Chinese customers have become the largest group of homebuyers in New York, Sydney and London and this has significantly driven up local home prices. Hence some people have called into question the legitimacy of the money spent on buying these homes overseas. Are you concerned about the possible backlash to such massive home buying by Chinese overseas? And will the Chinese government introduce new policy measures to boost the domestic real estate market this year?
Premier Li Keqing:
China is advancing the renminbi’s full convertibility under the capital account. This shows that China is taking further steps to open up the capital market. You talked about the phenomenon of large numbers of Chinese buying homes overseas and said that they have become the largest home buyers in a number of key international metropolises. I suppose that more evaluations need to be done here as to whether that is true. As far as I’m concerned, I am not in possession of solid information about this. But what I know is that China is still the largest destination of the inflow of foreign direct investment, which now stands at $120 billion. At the same time, the Chinese government will also encourage Chinese companies and Chinese nationals to go overseas to invest and do business. In doing so, these Chinese companies and Chinese nationals need to abide by China’s relevant laws and regulations and also observe the local laws.
You have a Westerner’s face but you speak Chinese so well. I wonder if you have bought a home in China – you are welcome to do so.
China is still a large developing country. Housing is not just an economic issue but also one that concerns people’s livelihood. The Chinese government needs to meet the basic housing needs of low-income people around the country. And the government will take more steps this year to rebuild rundown urban areas and dilapidated homes in urban and rural areas. The plan for such efforts this year is to increase building and rebuilding rundown areas and dilapidated homes – by 1 million units respectively. The Chinese government is responsible for providing everyday necessities in terms of housing for our people.
The real estate market is governed by its own laws. China is such a large country with vast land.
In this country, there are mega cities and medium and small-size cities as well as small townships. And the conditions of these different cities and townships vary significantly from one to another. Hence the central government has requested the local governments to exercise their responsibilities concerning regulating local real estate markets. And differentiated policies need to be adopted in the light of local conditions. At the same time, urbanization continues to pick up speed in China which means that housing demand in China is here to stay. We also encourage Chinese people to buy homes for their personal use or as their second home. We hope to see a steady and sound growth of China’s real estate markets in the long term.
Korean Broadcasting System:
China’s CPI rise was at just about 1.5 percent in the past few months – and in January the figure was near 0.8 percent. So are we to conclude that China entered deflation? Some people also argue that China is exporting deflation to other parts of the world and that it has also affected the Republic of Korea, what is your response?
Premier Li Keqing:
About deflation, there are multiple criteria in evaluating deflation in the world. A major criterion is the consecutive negative growth of overall consumer prices in the country. Regarding CPI, last January we had positive growth. And the figure of February further increased. So I don’t think we are facing deflation in China.
Recently, consumer prices in China have been quite low, but China is not exporting deflation to other parts of the world. The truth is, China is at the receiving end of deflation. Let me give you an example: Last year, China imported 310 million metric tons of crude oil and about 930 million tons of iron ore from the international market.
The physical volume increased but the price declined because of the tumble in international commodity prices – and we are prepared to cope with such a situation. At the same time, we hope to see a quicker global economic recovery – and the global economy will regain momentum for robust growth.
Messages highlighted by the premier:
Cut red tape to help businesses and ease downward pressure on the economy.
E-commerce can help create jobs.
Self-discipline among civil servants and “rule by law” can help reduce corruption.
China has many tools in its box to create steady economic growth during the downturn, but he did not elaborate.
Encouraging innovation and entrepreneurship can help invigorate the economy.
A visit by President Xi Jinping to the United States later this year can help improve Sino-US relations.
The 70th anniversary of the end of the Second World War will be a chance for a turnaround in Sino-Japanese ties.
China is still a developing nation and should not be considered a developed country.
