China’s new premier seeks to reassure private sector

Li, installed as premier on Saturday during the annual session of China’s parliament, is tasked with reviving the world’s second-largest economy after three years of Covid curbs.

But he faces challenges including weak confidence among consumers and private industry, sluggish demand for exports and worsening relations with the United States.

Making his public debut in a wide-ranging media conference, the former Communist Party secretary of Shanghai and close ally of President Xi Jinping also said China will take measures to boost jobs, especially in the services sector.

“Developing the economy is the fundamental solution for creating jobs,” Li, 63, said during the televised session at the Great Hall of the People in central Beijing.

China’s private sector has been rattled in recent years by a sweeping regulatory clampdown targeting some of its most vibrant industries, including the internet and private education.

At the opening of the annual parliamentary session, China set a GDP growth target of 5%, its lowest goal in nearly three decades, after the economy grew just 3% last year.

Achieving the target would not be easy, Li said, with China facing many difficulties this year.

‘Great wall of steel’

Earlier on Monday, Xi said China needs security to develop and must modernize its military to make it a “Great Wall of Steel”, calling for China to step up its ability to safeguard national security and manage public security.

Xi was speaking for the first time since the National People’s Congress, China’s parliament, unanimously voted to confirm him in a precedent-breaking third term as China’s president.

“Security is the foundation for development, stability is the prerequisite for prosperity,” Xi, 69, said at the closing of the annual parliament session.

The ruling Communist Party is expected to tighten party oversight over security matters, a move that comes after Xi replaced top security officials with his trusted allies.

Xi said China will distribute the fruits of development more equitably, in an effort towards “common prosperity”, his signature policy of reducing wealth gap by ways such as asking private firms to pitch in.

China must achieve greater self-reliance and strength in science and technology, Xi said, a call that comes as the United States blocks China’s access to chip making equipment and other cutting-edge technologies.

On Taiwan, the self-ruled island which China claims its own and a major producer of semiconductors, Xi said China must oppose pro-independence and secessionist activities and the interference of external forces.

China’s relations with the United States sank to a low after U.S. House Speaker Nancy Pelosi visited Taiwan in August 2022. China launched unprecedented military drills around Taiwan and halted military dialogue with Washington.