China focuses on development of its remote west to spur growth

With China, the world's second largest economy, facing a slowdown, Premier Li Keqiang on Tuesday said that the government would now focus on infrastructure development of the remote western region to spur growth.

Updated: Aug 20, 2013, 14:55 PM IST

Beijing: With China, the world's second largest economy, facing a slowdown, Premier Li Keqiang on Tuesday said that the government would now focus on infrastructure development of the remote western region to spur growth.

China is betting on its western development programme to lead a new round of economic growth as the government is mulling "differentiated" policies for the region that will feature huge spending on infrastructure, Li said while on tour of the region.

"We will roll out more preferential policies tailored for the western region concerning infrastructure projects, to accelerate the construction and upgrading of rail and road networks," official media quoted Li as saying.

His comments coincide with a policy announced by the State Council yesterday to prioritise railway construction in the country's central and western areas as well as economically underdeveloped regions.

China will try to maintain sustainable economic growth and improve people's livelihoods in the next decade, and the central and western areas provide adequate room for further growth, Li said, adding healthy economic development in the western region holds the key to the country's overall economic health.

"Differentiated policies" should be drafted for the western region, he said.

China's economic expansion has decelerated in recent years, with GDP rising 7.5 percent in the second quarter, down from 7.7 percent in the first.

Li underscored the role of reform in promoting sustainable growth, pledging to keep the economy from big fluctuations and maintain steady performance.

To achieve sustainable and healthy development, the authority should stick to rebalance the economy while keeping growth, employment and inflation within the reasonable range, Li said in Lanzhou, quoted by state-run Xinhua news agency.

When the economy is heading towards its targeted limits, reform is needed to coordinate the policies and "make precise moves" to maintain steady growth, he said.

"The major task and targets of the government is to achieve a sustainable economy, improve people's lives and promote social equity," he said.

Chinese economy has been slowing since the last two years and officials are concerned that this year it may miss the targeted 7.5 percent GDP.

With the global economy still in arduous recovery, the domestic economy has achieved progress, but some much-accumulated conflicts have loomed large, Li said.

Earlier, China's central bank governor Zhou Xiaochuan said the economy will not post persistent slowdowns, indicating the bank is ready to free long-awaited deposit interest rates, a key step to fully liberalise the financial market.

PTI