Premier Li says "a lot of room" left for China consumption to grow

Chinese Premier Li Keqiang speaking during a luncheon hosted by economic organisations, at a hotel in Seoul, South Korea, on Nov 1, 2015.
Chinese Premier Li Keqiang speaking during a luncheon hosted by economic organisations, at a hotel in Seoul, South Korea, on Nov 1, 2015.PHOTO: REUTERS/YONHAP

SEOUL(Reuters) - China is firmly committed to restructuring and reforms and consumption has "a lot of room" to grow, Premier Li Keqiang said today, dismissing concerns that the economy may be at risk of a hard landing.

The world's second-largest economy continues to grow at nearly 7 per cent, Mr Li told a gathering of business leaders in South Korea, which counts China as its largest export market.

"The Chinese economy will maintain a mid- to high-level of growth for quite some time in the future," Mr Li said, according to comments released by the Korean Chamber of Commerce and Industry, one of the groups that hosted the premier.

"We will firmly pursue restructuring and reform. There may be fluctuations in economic indicators but there will not be major ones."

Mr Li is on an official visit to South Korea and attended today the first summit of the leaders of South Korea, Japan and China in more than three years.

"China possesses a large market, and it has potential, in particular, the consumption potential has not been fully realised," he said. "We believe Chinese consumption is at half (its capacity). There is still a lot of room."

China said last week that it will significantly increase the share of consumption in its economic growth in the next five years and increase its targeted adjustment to economic policy to keep growth at a relatively quick pace.

Mr Li said it was natural for the rate of growth to slow as the economy grew in scale.

"You may have seen reports that the Chinese economy is continuously slowing, but when you look at the figures, the rate is gradually falling."

Weighed down by weak exports, industrial overcapacity and high local government debt, China's economy grew by 6.9 per cent in the third quarter from the same period a year earlier, far more robustly than more developed economies but still its slowest pace of expansion since the global financial crisis.

Earlier today, South Korea reported its exports slumped the most in more than six years in October, with hefty drops in shipments to China, the United States and Europe suggesting a further weakening in global demand.