Beijing: Allaying fears of a crisis in China whose debt crossed a whopping USD 3.4 trillion, Premier Li Keqiang Thursday said the country will push through market reforms and keep economic expansion strong enough to spur growth and create jobs.
Li's comments came after the country's first-ever default on a domestic corporate bond last week and as investors grow worried that other firms could follow suit.
China has attached "very high attention high attention" on government debt and risks in this area are generally within control, Li told his annual press conference at the end of the parliament session.
He also defended the fixing a modest 7.5 percent target for GDP, saying it is right for strike a balance between growth, job creation and controlling inflation.
Li said reforms in key areas have been been set as a priority on the country's overall reform agenda in 2014.
"The ultimate goal of all the reforms is to fully energize the market," said the premier adding that the country would "carry out the reforms without hesitation".
Citing an official audit of government debts last year, Li said the country's debt-to-GDP ratio is still below the internationally recognised warning line.
After two months of nationwide audits, the National Audit Office disclosed that governments at various levels were liable for a total direct debt of 20.7 trillion yuan (USD 3.4 trillion) at the end of June last year, up 8.6 percent, or 1.63 trillion yuan, since the end of 2012, state-run Xinhua news agency reported.
China's mounting government debt is considered as a latent danger to financial stability and China has started to take steps to address the issue.
Li said while the debt level is within control but at the same time cautioned that the problem should not be overlooked, promising to take further regulatory steps, including putting the debt under budgetary management, to strengthen oversight.
In China, local governments are not legally allowed to borrow funds on their own.
The fiscal funds they receive from the central government and other sources of revenue, such as taxes, cannot meet their funding needs either, forcing them to use back-door approaches for funding that involves state-owned firms and local government financing vehicles.
"We will keep the front open and block side doors," Li stressed as he held his once-a-year news conference after the close of the annual session of the National People's Congress (NPC), the Communist Party-controlled legislature.
Li also said that authorities have set a timetable for implementing the Basel III accord in tightening regulative measures over "shadow banking".
Regarding the defaults of financial products, Li said avoiding a few individual cases would be difficult, but efforts must be taken to make sure regional and systemic financial risks do not occur.
Li said: "We are not preoccupied with GDP growth. The growth that we want is one that brings real benefits to the people, helps raise the quality and efficiency of economic development, and contributes to energy conservation and environment protection."
His comments cam after the government announced last week that the country will target an unchanged growth of around 7.5 percent in 2014.
It also vowed to keep inflation at around 3.5 percent and create 10 million more urban jobs to ensure the registered urban unemployment rate does not rise above 4.6 percent.
Li said the government would also continue with the nationwide crackdown on corruption.
"China is a country under rule of law. No matter who he is, and how senior his position is, if he violates party discipline and the law of the country, he will be punished to the full extent, because everybody is equal before the law."
"Corruption is a natural enemy of the people's government," Li said adding, "We must put the exercise of power and the use of public money under institutional checks."
Li said the Communist Party of China (CPC) and the Chinese government are firm in will and determination to fight corruption, and "that is our consistent position".
The government will step up its efforts for the release of "a list of powers" and define a clear boundary for the exercise of power to ensure that it is not abused, he said.
The government will also carry out comprehensive audit in those areas which are of high concern to the public, such as the revenues on the transfer of land use rights and transfer of mining rights, according to Li.
"We will take institutional steps to ensure corruption will have nowhere to hide," he said.
Responding to a question about smog that frequently blanketed Beijing and some other major cities since winter, Li said polluters, who are responsible for harming both nature and human health, will be severely punished.
China needs both tough measures and tough regulations to fight pollution, Li said elaborating on his remarks that his government declared war on recurring smog.
Watchdogs which turn a blind eye to polluting activities and fail to perform their duties will be held accountable, he said.
"To declare a war on smog doesn't mean we are declaring a war on nature. Rather, we are going to declare a war on our own inefficient and unsustainable model of growth and way of life," he said.