BEIJING May 1 China will not relent by
loosening policy to shore up its economy or calm a volatile
yuan, even though it has entered a "painful" phase of
restructuring, Premier Li Keqiang wrote in remarks published on
In an article published in the ruling Communist Party's
influential journal Qiushi (Seeking Truth), Li repeated that his
government was comfortable with a slowing economy as long as
growth stayed within a "reasonable range".
Growth in China, the world's second-largest economy, slumped
to its slowest in 18 months in the first three months of this
year as government reform efforts and lacklustre demand for
exports took their toll.
That has prompted some experts to speculate that China may
loosen monetary policy more forcefully - such as reducing the
amount of cash that banks hold at the central bank - to shore up
But Li said China needs fortitude in dealing with its
"We will stick to our convictions, and not dance to the
frequent fluctuations in markets, not change policy because of
divergent voices, and will persist in not expanding the budget
deficit," he wrote.
"Even if there are short-term fluctuations in the currency
market, we will face it calmly."
His remarks came as the yuan plumbed an 18-month low
on Wednesday, hurt in part by traders' souring sentiment
towards the currency as the economy sags.
Li made no reference to the yuan's weakness, stressing
instead that his government would focus its energy on pursuing
Allowing private investors to set up financial institutions,
freeing the interest rate market, and setting up a system to
insure deposits will be prioritised were among this year's
reforms, Li said.
Cutting government red tape, encouraging provincial
governments to make public their annual budgets, deepening a
reform of taxes, and better delineating the division of power
and spending responsibilities between the central and local
governments would be other areas of focus, he said.
(Reporting by Koh Guiqing, Li Hui; and Ben Blanchard; Editing
by Ron Popeski and Robert Birsel)