Chinese Premier Li Keqiang (front, C) gives a speech about economic situation at the 16th national congress of the All-China Federation of Trade Unions, in Beijing, capital of China, Oct. 21, 2013. [Xinhua]

Second, medium and long-term trends in the Chinese economy

After 30 years of reform and opening up, China's economy has grown at an annual rate of 9.8 percent. This is a miracle. But given the status quo, if China's economy continues to rely principally on investment, then there will be more bottlenecks in energy, resources and the environment. It will be difficult to continue with the high investment and high energy consumption model. It is also worth noting that China's competitive advantage of low costs is also diminishing. The aim of economic growth is to improve people's lives and ultimately advance their living standards. It is therefore necessary to increase people's salaries. As well as human costs, the cost of land and other factors is also increasing. China's GDP is now on a higher level. There is a huge difference between increasing 1 percent of China's GDP based on last year's 52 trillion yuan and that based on 5 or 10 trillion yuan.

As a middle-income nation, China's economic growth has gone from medium to high speed. What does this mean? I think that a 7.5 percent or above 7 percent increase is medium speed. We call it "medium" in comparison with China's past economic growth. The economy has maintained double-digit growth for years, averaging at 9.8 percent, so it is medium growth in comparison with this. But in comparison with other countries, it is still high-speed growth, especially for a large country. We have estimated that an annual growth of 7 percent will enable us to build a moderately prosperous society by 2020. This growth will help every sector to adjust structures, handle over-capacity, strengthen energy conservation and environmental protection, enhance economic quality, and leave more room for sustainable development. China has great potential for long-term, sustainable and sound economic growth, as we are still in the process of industrialization and urbanization. China's urbanization rate is 52 percent, but that includes residents who have lived in the urban areas for more than half a year. The registered urban population is less than 35 percent, much less than that of developed countries and developing countries which are at similar level to China. But this indicates potential on our part. As well as the urban-rural gap, there is also a huge disparity among China's eastern, middle and western regions. China's per capita GDP is US$6,000 on average: it is more than US$10,000 in some areas of eastern China while it is only US$3,000 in western China. The indeed signifies potential. More importantly, we have a huge dividend from reform. The achievements we have made in the past three decades can be attributed to our reform and opening-up. There is no limit to reform. We are resolved to reform comprehensively and to promote it with the determination of a warrior cutting one's own wrist. The reforms include disclosing our fiscal budget, cutting down public expenses, financial reforms including liberalizing interest rates, making loans more available for small and micro businesses and lowering costs. Of course reforms will intrude on vested interest. But since reform is aimed at the people's interest, and there is no bigger interest than that of improving the lives of tens of millions of workers, so we must proceed without hesitation.

I want to emphasize that there are many risks and challenges on the road ahead, such as fiscal and financial risks, the irrational industrial structure, weak agricultural foundation, resources and environmental constraints, and weak technical innovation. Emerging economies are catching up with us and developed countries have advanced economies and technology. These two aspects are squeezing our economic development from two sides. It is not easy to maintain sustained and healthy economic growth. We must think of adversity in times of prosperity, become more aware of hidden risks, and prepare well for a complicated and difficult situation. To deal with these risks and challenges, we need courage and wisdom, to make a concerted effort, and be of one mind. There will be pain, but we must believe that if 1.3 billion Chinese people including millions of Chinese workers are going to modernize the country, and live good lives, then our will must be unshakeable. We possess this strength.