China reforms likely to be slow and steady: analysts
By Julien Girault, AFPDALIAN, China -- Business executives and analysts on Thursday welcomed Chinese Premier Li Keqiang's pledges of reform in his inaugural speech at the World Economic Forum's “Summer Davos” meeting, but warned the process will be slow and incremental.
September 13, 2013, 12:06 am TWN
Li, who took office six months ago, delivered a message of change in the world's second-largest economy to global business leaders gathered in Dalian, in northeastern China.
“China's modernization will not be accomplished without reform, nor will it be achieved without opening up,” he said.
“Without structural transformation and upgrading, we will not be able to achieve sustained economic growth.”
He pledged China would make its yuan currency freely convertible and allow bank interest rates to be set by the market — but did not give any timetable for the moves.
Li's remarks came before a key Communist Party meeting in November but analysts said a “big bang” approach to change was off the table.
“China would be very ill-advised to call for a 'big bang', they will take progressive steps,” said Hellmut Schutte, vice president of the China Europe International Business School.
James McGregor, greater China chairman of business strategy firm APCO Worldwide, added: “At the plenum, I think we are going to see some directional reforms, but I don't think you'll see a great-leap-forward reform.
“Li Keqiang is trying to reassure the business community that, if things look a little bit dodgy right now, wait and see because we are heading for more reforms,” he said.
Li's comments followed Chinese authorities targeting foreign companies in the baby formula, drug and auto industries over high prices, as well as a corruption probe of British pharmaceutical firm GSK for alleged bribery.
China has repeatedly vowed to move towards making its currency fully convertible, meaning the unit could be freely bought and sold, allowing unrestricted movement of funds in and out of the country.