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China's Premier Li tells WEF CEOs that China's a profitable place to invest

Almost all foreign companies in China got a sweet return on their investment, Premier Li Keqiang told an audience of 180 global and Chinese CEOs at the World Economic Forum in Tianjin.

High-profile founders Marc Benioff of Salesforce.com , Travis Kalanick of Uber and Lei Jun of Xiaomi were among the business leaders at the exclusive event, where Li spurned an opening address, saying he wanted to get right down to business and take questions from CEOs attending 2016's "Summer Davos."

Benioff asked Li what he saw as China's most urgent challenges, and how businesses could partner with China to overcome them.

Li said private businesses, both domestic and from abroad, had helped identify barriers to growth and innovation in China, but at the same time, he emphasized that even foreign companies that had encountered problems doing business in China had still done very well.

"Even if you may have encountered a certain kind of difficulty or friction in the process, I believe if you take a look at the several years of your investment or your company, I feel pretty confident to say that for the vast majority of foreign investors, they will feel they have had a pretty high yield for their investment in China," Li said.

The Chinese Premier got a loud laugh from the audience when he added, "It's not just a vast majority - I think it's over 99.9 percent."

Chinese Premier Li Keqiang gives a speech during the World Economic Forum on June 27, 2016 in Tianjin, China.
Wang Zhao | Pool | Getty Images
Chinese Premier Li Keqiang gives a speech during the World Economic Forum on June 27, 2016 in Tianjin, China.

Alcoa chief executive and chair Klaus Kleinfeld brought up an issue that's made headlines, asking Li how China planned to manage overcapacity in some industries.

"We've been working hard to phase out overcapacity, mainly in the steel and coal sectors. In the next few years we expect to phase out 100-150 million tonnes of excess steel capacity and 800 million tonnes of coal-making industrial capacity," Li responded. "That will involve the jobs of two million people."

However, Li expressed confidence on the "new economy," including the growth of digital entrepreneurship, would help those workers find new jobs.


KPMG 's global chairman John Veihmeyer wanted to hear from the Premier some details on China's efforts to strengthen its capital markets.

"In developing capital markets here in China, we will guard against systemic and regional financial risks, and guard against so-called cross-infection of different financial markets. We'll also reform and improve our regulatory financial regime," Li said.

"Just as China's economy [does], markets may have short-term fluctuations, which is unavoidable, but we will not allow roller-coaster rides of capital markets."

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