Address on current economy

You have seen the recently released economic data for the first three quarters of this year. Growth rate has picked up, rising from 7.5% in the second quarter to 7.8% in the third quarter. Although CPI rose slightly higher to 3.1% in September, the figure for the first three quarters stood at 2.5%, well within our target band of 3.5%. More importantly, over 10 million new urban jobs were created in the first three quarters. Registered urban unemployment rate was 4.04%. Industrial electricity consumption and rail cargo volume increased by 9.8% and 7.3% respectively in the third quarter, matching the growth of the economy in the same period. I've read today foreign press comments, which are bullish about China's economic data. Some fair-minded foreign economists pointed out in their articles that prediction about the decline of the Chinese economy has once again proved wrong and that those who foresaw a hard landing for China's economy are now going to regret themselves. Indeed, our economy on the whole is stable and making steady progress, and we are fully capable of meeting major targets of economic and social development set for this year. It is important to have confidence. Where does confidence come from? The most important source of confidence is our great working class and the diligence and wisdom of hundreds of millions of Chinese workers you represent here today. You probably remember that despite the impact of the international financial crisis in 2008, the Chinese economy still did quite well in 2009. The US TIME magazine carried photos of Chinese workers, including migrant workers, on its "Person of the Year" list. The magazine took the view that it was Chinese workers who had held up China's rapid economic growth, a result achieved mainly because of their diligence, diligence and diligence and that no one works harder than Chinese workers. I told them that they missed one word, and I now want to repeat to you the word three times like they did: wisdom, wisdom and wisdom!

What we are doing now is to ensure not only stable performance of the economy, but also continued social progress. In fact, while pursuing social progress, we have overcome all kinds of challenges, including natural disasters, to keep the economy on a stable footing. For instance, after an earthquake hit Lushan, Sichuan Province several months ago, the central Party leadership and the State Council mobilized various resources and launched a timely, effective, well-organized and orderly rescue operation. When I arrived on the scene, roads had been blocked and traffic cut off. But very soon helicopters joined rescue efforts. By the time I reached the epicenter, officials from neighboring provinces were already there. This shows that the people in the country are eager to help victims of the disaster. The swift action taken also shows that Sichuan Province had gained experience from dealing with the Wenchuan earthquake. We made a decision there and then that to ensure orderly and smooth rescue operation, Sichuan Province should take main charge with the help of a working group dispatched by the State Council which would provide Sichuan with what it needed. This helped us minimize the death toll. The Central Government then decided that similar future disasters should be handled in the same way. Likewise, thanks to experience gained from fighting the SARS epidemic and influenza A (H1N1) pandemic, we were able to prevent and control the avian influenza (H7N9) in a scientific and orderly fashion.

We have also worked hard to resolve problems of concern to the people. Take air pollution for example, we have adopted a ten-point action plan to improve air quality in Beijing within three to five years. We will make every effort to remove pollution sources. But this, of course, takes time. We have also intensified regulation and supervision over food and drug safety. During the reform of government departments, we placed responsibilities for food and drug safety scattered among various government departments under the newly established China Food and Drug Administration. This avoids shifting responsibilities, a situation aptly described in Chinese fables: In one case, nine dragons entrusted with fighting flood shifted responsibility to one another, causing failure in flood control. In another case, three monks all shirked the responsibility of bringing water from the well, and as a result, all had no water to drink. We have also addressed the issue of infant formula, placing it under drug regulation to ensure its safety. In short, we need to pursue coordinated economic and social development to ensure long-term, sustained and healthy growth of the Chinese economy.

Second, the mid-to-long term development trends of the Chinese economy

Over the past 30 years and more since reform and opening up program was launched, the Chinese economy has registered a miraculous average annual growth rate of 9.8%. But at the current stage, if we continue to depend excessively on investment, we will face increasing constraints of energy, resources and the environment, and fast growth based on heavy investment and energy consumption is also hard to sustain. We should also recognize that our competitive edge in cost is dwindling. Ultimately, economic growth is about improving people's lives and delivering a life of higher quality to them. It is thus natural to increase wages. Both the labour cost and the cost of land and other factors have increased. But the baseline of our GDP is also rising. Last year, our GDP was 52 trillion yuan. A 1% growth on such a basis is surely much larger than a 1% growth when the GDP was 5 trillion or 10 trillion yuan.