China has fended off the major risks to its financial system while its economic prospects remain positive, Premier Li Keqiang tells the World Economic Forum in Dalian. David Pollard reports.
China on guard for economic risk .... Premier Li Keqiang used the World Economic Forum in Dalian to issue a message of reassurance. Its equity markets have fallen around 40% since June. And China's economy is facing downward pressures: even Li himself admitted that. But prospects, he says, remain positive. And the government has fended off major danger with recent measures. Though those are in no way meant to weaken financial markets. (SOUNDBITE) (Mandarin) CHINESE PREMIER, LI KEQIANG, SAYING: "For our next step, we will continue to persist with a market-oriented, law-based system to establish an open and transparent capital market which will enjoy for long-term healthy development." He's the latest policymaker to issue soothing words in recent weeks. Earlier in the day, China's finance ministry said it would accelerate major infrastructure projects and reforms to its tax system. Nor, Li added, does China want a currency war. A fear sparked after a surprise move last month to devalue the yuan. The impact of China's troubles could, though, yet be felt, says Jan Randolf of IHS. (SOUNDBITE) (English) IHS GLOBAL INSIGHT, DIRECTOR OF SOVEREIGN RISK, JAN RANDOLPH, SAYING: ''I don't think we're in an emerging market crisis yet but there are a lot of adjustments taking place, policy and economic, adding up to slower growth in many emerging markets. That will then also knock back on to the developed economies of Europe and the US. We can't disentangle ourselves now from the importance of emerging markets on our own advanced economies.'' Data this week shows China's massive foreign exchange reserves fell by a record amount in August. That seen as a clear sign the authorities are doing what they can to prevent the currency sliding further.