Li said China faces challenges in hitting its goal to boost per
capita GDP to $12,000 by 2020 to avoid the middle income trap, as
growth is expected to remain sluggish and the domestic economy could
be hampered by structural problems.
The government will rely on both fiscal and monetary policy to
support the economy, while promoting innovations, Li said.
"We should made good use of the pro-active fiscal policy space and
reasonably step up tax cuts," he told a meeting of experts and
company officials.
"We should innovate monetary policy tools to help lower financing
costs of companies," he said without elaborating.
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President Xi Jinping has said that China must keep annual average
growth of no less than 6.5 percent in the next five years to hit the
country's goal of doubling 2010 gross domestic product and per
capita income by 2020.
China will also implement a policy of equalizing electricity prices
for industrial and commercial users, he added.
The central bank has cut interest rates six times since late 2014,
lowering reserve requirements, in a bid to support the world's
second-biggest economy.
The latest cuts in interest rates and bank reserve requirements came
on Oct. 23, after data showed annual economic growth slowed to 6.9
percent in the third quarter - the weakest since the global
financial crisis.
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The central bank has been injecting cash into the banking system via
its newly developed policy tools, including standing lending
facilities (SLFs), medium-term lending facilities (MLFs) and pledged
supplementary lending (PSL).
Meanwhile, the government has been stepping up spending on
infrastructure projects to support the slowing economy.
The government aims for a fiscal deficit of 2.3 percent of GDP this
year, compared with last year's deficit of 2.1 percent.
Finance Minister Lou Jiwei said in March the real fiscal deficit
this year would be 2.7 percent, the widest since 2009, after taking
into account unspent amounts from previously allocated funds.
(Reporting by Beijing Newsroom and Kevin Yao; Editing by Jacqueline
Wong)
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