Business / Opinion

Analyzing Premier Li's work report

By Wang Qingfeng (chinadaily.com.cn) Updated: 2014-03-06 10:40

According to Premier Li's speech, the ongoing financial reform will shift more power to the market on deciding interest rates and extend more autonomy to financial institutions such as banks on adjusting the deposit rate. Banks are now allowed to trade deposits with each other at market determined prices. The next step of interest rate liberalization will happen in the certificate of deposits market. The exchange rate adjustments are allowed to float within an enlarged target range. No concrete roadmap on how it works is laid out yet. My take is that the opening up of financial market or financial structural change will happen at a gradual and steady pace and with precaution in order to safeguard social stability and economic momentum. And, in my view it is also very unlikely that China will allow its currency's value to fluctuate according to the foreign exchange market in the coming years, at least this is not likely to happen before the smooth transition to the consumption-driven economy, where the exchange rate will not be as significant to the economy as at the moment, when the economy is to a large extent driven by export and investment.

Air pollution was one of the hottest topics in Chinese media coverage in 2013. It is also a key concern for millions in China. In many cities in China, air pollution readings often go above the safety limits recommended by the World Health Organization. In his speech, Premier Li reiterated that the government will act on curbing air pollution. His ultimate goal is to transform the country into a beautiful homeland with a sound ecological environment.

China is undergoing political, economical and financial reforms. China is also facing unprecedented opportunities and challenges. China will enjoy the opportunities of even higher economic growth for some time to come as the country is getting ready for further industrialization and urbanization, and there is considerable potential for regional development as stated in Premier Li's speech. China is bracing itself to take the challenges of downward pressure on economy from the reforms and from the global financial uncertainty, in addition to the challenges from a changing world political landscape.

The author is with the Nottingham University Business School China