China will remove all obstacles for growth: Li

China, which has entered a critical stage of reforms, will remove all obstacles for growth and deepen reform of the fiscal sector, taxation, finance and pricing, Vice Premier Li Keqiang said.

Updated: Apr 02, 2012, 15:34 PM IST

Beijing: China, which has entered a critical stage of reforms, will remove all obstacles for growth and deepen reform of the fiscal sector, taxation, finance and pricing, Vice Premier Li Keqiang said.

"Faced with the profound changes in international and domestic landscapes, we must let reforms and opening-up continue to lead the way in removing the institutional obstacles that hamper the shift of the growth model," said Li, who is regarded as successor to Premier Wen Jiabao.

Speaking at the opening ceremony of the Boao Forum for Asia Annual Conference 2012 in China's Hainan province, Li said China has entered a critical stage of reforms and will deepen reform of the fiscal sector, taxation, finance, pricing, income distribution and enterprises.

He said China will remove obstacles on its course to transfer growth mode and drive economic and social development.

China will endeavour to make breakthroughs in key areas and key links, and bring into better play the market's role in resource allocation and advance institutional, technological and management innovation so as to increase the internal driving force and dynamism of development, Li said.

China will also adopt an even more proactive opening-up strategy and attach equal importance to export and import so as to boost balanced development of foreign trade and raise the level of an open economy, he said.

More efforts will be made to step up intellectual rights protection to promote development of all enterprises in China during its course to transform growth mode, state-run news agency Xinhua quoted Li as saying.

More than 2,000 government, business and academic leaders from around the globe, including Deputy Chairman of the Planning Commission Montek Singh Ahulusalia, attended the meeting with the theme "Asia in the Changing World: Moving toward Sound and Sustainable Development."

Asian countries should promote internal drivers of growth and stay open and inclusive so as to achieve sound and sustainable development, Li said.

Li said Asian nations should work for mutual benefit and win-win result, promote solidarity and harmony and stay committed to peaceful development to achieve the goal.

Among attendants of the annual session are Italian Prime Minister Mario Monti, Kazakhstan's Prime Minister Karim Masimov, Pakistani Prime Minister Yousuf Raza Gilani, Iranian Vice President Mohammad-Javad Mohammadizadeh, Thailand's Deputy Prime Minister Kittiratt Na-Ranong and Vietnamese Deputy Prime Minister Hoang Trung Hai.

China-backed Boao forum focuses on three key issues this year - exploring the root source of global economy uncertainty, seeking reform and transformation and Asia's sustainable development.

In their letter, the global trade bodies also warned that some global companies have already started to re-evaluate their investment plans because of the uncertainty looming over the country's tax laws.

"Some of our member companies had already begun re-evaluating their investments in India due to increasing levels of controversy and uncertainty regarding taxation in recent years," it added.

The issue relates to the Supreme Court order which set aside the Bombay High Court ruling that had asked Vodafone Holdings to pay Rs 11,000 crore in tax as a result of acquiring Hutchinson-Essar Ltd in 2007 in an overseas deal.

In order to deal with the situation following the Supreme Court ruling, Mukherjee in his Budget proposed to amend the Income Tax Act with retrospective effect from 1962 to bring into the net overseas deals concerning domestic assets.

India, the letter said, "will lose significant ground as a destination for international investment if it fails to align itself with policy and practice around the world and restore confidence in the relevance of the judiciary."

The proposed changes would undermine confidence in the policies of India toward foreign investment and taxation, the letter said, adding "(it) has called into question the very rule of law, due process, and fair treatment in India".

Some of the other rulings and court decisions that are likely to get affected include those in cases involving Asia Satellite Telecommunications, Ericsson, Factset Research Systems, Infosys Technologies, Intelsat, ISRO Satellite Centre, Lucent Technologies, Motorola, and TV Today Network.

If tax law changes are made, they should not apply retroactively and past court decisions must stand despite subsequent legislation, the letter said.