In the news: China's leaders pledge to stabilize the economy, better handle foreign disputes, avoid layoffs in SOE reform and encourage more FDI in certain sectors

Premier Li Keqiang's March 16 press conference

At a news conference in Beijing marking the end of the 12-day National People's Congress, Premier Li Keqiang told reporters that although China will face short-term volatility, it has an “innovative” method in place to stabilize the economy in the long run. The nation  needs to “keep its eyes open for financial market risks, prevent these risks from spreading from the current form and enhance supervision,” he said. He emphasized that “reform and development are not in conflict” and that although he is unable to predict whether China can achieve its economic growth target (6.5%-7%), staying on the reforms course will prevent China from suffering a hard landing. The Hong Kong-Shenzhen stock connect will also probably start this year. Premier Li acknowledged financial risks such as an increase in banks' non-performing loans, pledging to promote market-oriented policy changes and to support the real economy and smaller businesses. He addressed the need to convert the country's mounting debt into equity – a comment met with controversy as the CBRC chairman had said earlier that morning that China must move cautiously regarding debt-to-equity swaps. Reports say authorities are drafting rules to make it easier for lenders to convert bad loans into equity stakes in debtor companies.

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