BEIJING—Chinese Premier Li Keqiang, addressing an irritant in relations with the U.S., said that China’s government doesn’t ask companies to spy on its behalf and pledged not to do so in the future.

Asked at a news conference on Friday about China-U. S. competition and whether Beijing forces its companies to conduct espionage, Mr. Li first didn’t respond to the spying question but later returned to give an emphatic denial.

“Let me tell you explicitly that this is not consistent with Chinese law. This is not how China behaves,” Mr. Li said. “We do not do that and will not do that in the future.”

Mr. Li’s comments were the highest level to date from China’s government about a prominent allegation the U.S. has leveled against Huawei Technologies Co.: that the Chinese networking gear-maker’s equipment is a security risk because the company can’t resist government requests to commit espionage. The company is considered a national champion in China and key to government goals to dominate the global rollout of the next-generation information network known as 5G.

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In his remarks, Premier Li didn’t mention Huawei, and he gave an upbeat assessment of China-U. S. relations despite points of friction over trade as well as security. He said decoupling the two economies isn’t possible, and he expected trade talks between the two to reach a positive outcome for both sides.

During the 2 ½-hour news conference, Mr. Li was similarly positive about the government’s abilities to shore up economic growth and deal with a downturn whose severity surprised the Chinese leadership.

To bolster growth, Mr. Li said the government is reducing taxes and other burdens on businesses and is considering cutting some interest rates and the portion of money that banks are required to place in reserve.

Whatever measures it reaches for, he said, the government doesn’t want to exacerbate long-term problems in the economy—a nod to the high-levels of corporate and local government debt and other structural issues that Beijing has struggled to resolve in recent years. Mr. Li said the government will scrape together 1 trillion yuan ($148.7 billion) this year by reducing expenditures, collecting higher dividends from state firms and retrieving unspent funds previously allocated.

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Throughout the news conference, Mr. Li repeatedly said the government wants to make sure that freeing up credit and other measures are intended to help “the real economy,” particularly private and other small companies, to keep employment up and prevent “layoff waves.” He promised to cut broadband-internet fees, highway tolls and electricity costs.

The premier’s news conference is an annual event, the only regularly scheduled time a member of the Chinese leadership answers media questions, which are largely screened in advance.

While the premier has in recent decades been tasked with running the government and overseeing economic policy, Mr. Li has seen his power scaled back by President Xi Jinping, the undisputed head of the Communist Party leadership. Mr. Xi has restructured party and government offices and set up special commissions to centralize authority in his hands.

As he has in his six previous annual news conferences, Mr. Li etched out a vision for restraining government spending to unleash the vitality of companies and people so that the economy can be repositioned on a sustainable path for continued growth. While Mr. Li’s program is reducing taxes and red tape, President Xi has bolstered the size and influence of state-owned companies, whose demand for credit crowds out private firms, raising their financing costs.

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Several times in the news conference, Mr. Li returned to U.S.-China relations and parried criticisms by U.S. officials and businesses that Beijing isn’t doing enough to provide fair access to its economy. Mr. Li noted a new foreign investment law passed by the national legislature on Friday as a tangible commitment to improving the business environment.

He said the law includes mechanisms to handle complaints and to ensure information disclosure for transparency and promised fast follow-up in issuing regulations to put the law in force.

Write to Chun Han Wong at [email protected]


https://www.thestar.com/wsj/business/2019/03/15/premier-vows-china-doesnt-and-wont-instruct-companies-to-spy.html

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