On the afternoon of 21 January 2015 local time, Premier Li Keqiang of the State Council attended a dialogue session with members of the International Business Council of the World Economic Forum in Davos, Switzerland. The session was moderated by Alcoa Chairman and CEO Klaus Kleinfeld. The following is the transcript of the dialogue.

Premier Li: Ladies and gentlemen, dear friends, when I landed at the Zurich airport yesterday, it was drizzling, reminding me of the current world situation: a weak economic recovery and peace and stability facing threats. But when we got to Davos, it was all sunshine here. It is you, entrepreneurs from across the world, those having links with China in particular, who have brought sunshine to Davos. I am delighted to have this interaction with you.

Klaus Kleinfield: If my memory serves me right, the Communist Party of China held the third plenum of the 18th Central Committee late 2013. A series of major decisions were adopted at the plenum, including reforming state-owned enterprises and encouraging private investment, foreign investment and competition. What will be the priorities of China's economic reform this year? With 2015 being the last year for implementing the Twelfth Five-year Plan, I would like to know the long-term development plan that China envisages. How can the global business community help China advance reforms in these areas?

Premier Li: China is deepening reform on all fronts. The most powerful drive for China's economic development comes from our people's aspiration for a better life and from reform and opening-up. This year, we will press ahead with reforms in key areas. First, we will continue to handle well the relationship between the government and the market, and take more solid steps in government reform. Since its inception, this government has slashed items that require State Council's review and approval by one third. Entrepreneurs who have business in China may know that in the past, one had to seek the approval of several government departments before his business operations could get started in China. And applications for setting up new businesses, joint ventures included, may need to be approved by dozens of departments. Such a time-consuming process was inefficient and left room for rent-seeking and corruption. This year, we are determined to continue the reform of the administrative approval system, abolishing unnecessary requirements for licenses and certificates as well as non-administrative approval items. Reform will take place in wider areas and at deeper levels. The purpose is to unleash greater market vitality and foster a level playing field. I hope that for all the business people coming to invest in China, it will take them less time to get things done and there will be lesser a need for them to build networks of connections. This way, they could channel more energy into developing businesses.

Second, we will press ahead with fiscal, tax and financial reforms. In the fiscal field, all government budgets will be made public. Government spending will focus on supplying public goods and services rather than those competitive areas to avoid unfair competition. In the financial sector, we will promote financial inclusion, vigorously develop small and medium-sized banks as well as private banks, and build a multi-tiered capital market, so that businesses can gradually reduce their leverage ratio through direct financing on the capital market.

Third, we will continue to build an open system. We are experimenting with a management model based on pre-establishment national treatment and a negative list, and further opening up the service sector. All foreign investments used to be subjected to government approval, whereas now most such investments only need to be reported to the government for record, and government approval is needed only in limited cases. In a word, our reform is a comprehensive one, and the above-mentioned areas are only some focuses. We will open our door wider and we welcome foreign investors.

As for China's development plan, this is a question too broad to answer within a short time. In a nutshell, we will accomplish all major tasks set out in the Twelfth Five-Year Plan this year.

Carlos Ghosn, Chairman and CEO of Renault-Nissan Alliance: We've been attending the World Economic Forum in Davos in the past 10-plus years. Each year, there's been a keen interest in China's development, and there has also been worry about it in some areas. This year is no exception. We've seen a cooling real estate sector, over-capacity and risks from shadow banking. What do you think are the major risks and challenges that China needs to tackle?

Premier Li: Indeed, there has been some fluctuations recently in the investment and transaction volumes of China's property market, drawing attention from various sides. But I want to emphasize that China's urban population increased by 18 million last year, adding another 1.04 percentage points to the urbanization rate, which now stands at about 55%. As urbanization pushes forward in the course of modernization in China, there will a long-term, inelastic demand for housing. And it is also normal for some adjustments to happen on the property market within a certain period of time.

The Chinese government hopes to see long-term, steady and healthy growth of the property market. The government's primary task is to ensure basic housing for people who can hardly afford it themselves so that everyone can have a place to live. This year, we will intensify efforts to rebuild run-down areas in cities. Now, about 100 million people live in such places and many others live in dilapidated housing in both urban and rural areas. We will scale up investment to ensure basic housing for people with difficulties. This shows from another angle that the housing investment demand in China will last and it will surely boost related industries and product supply.

The Chinese government has already paid high attention to shadow banking. Last year, we took measures to ensure that financial institutions put some off-balance-sheet businesses onto their balance sheets. We hope to put as many shadow banking activities under oversight as possible. In the meantime, I should point out that China's savings rate has exceeded 50%, and Chinese banks have adequate capital and provisions for non-performing or bad debts. We are capable of regulating shadow banking activities and averting moral hazards, and individual irregularities will be handled in accordance with the law. No country in the world has ever been able to fully resolve the shadow banking issue. Although isolated risks might occur, the Chinese government is able to stave off regional and systemic financial risks.

Ellen Kullman, Chairman and CEO of DuPont: After the Beijing APEC meeting last November, China made a historic and commendable pledge to cap its CO2 emissions by 2030. Given China's coal consumption and rapid urbanization, how can the global business community, as partners of China, help China deliver this commitment?

Premier Li: I appreciate you raising the issue of climate change. A wise man once said that mankind can hardly control the environment, but they can control their own actions. China has announced that it will cap its CO2 emissions around 2030 and increase the share of non-fossil fuels in primary energy consumption to around 20% by 2030. This requires persistent and even painstaking efforts as China, after all, is still a developing country with over 1.3 billion people. As you may know, coal accounts for about 70% in China's energy mix. This is the reality we face, which is determined by our resource endowment. Going forward, we will endeavor to bring down the share of fossil fuels, coal included, in overall energy consumption. Meanwhile, we will promote clean coal technology and we need help from the international community in this respect. Many developed countries have advanced technologies in this field, and we hope you will export clean coal technology and products to China. There is a huge market here. As a major developing country, China shoulders unshirkable responsibility in tackling climate change. We have been active in meeting the challenge and will fulfill our due international responsibility. We also maintain that the principle of "common but differentiated responsibilities" should be upheld. China will do its best to achieve both environmental protection and development, pursue a green and low-carbon economy, and nurture the new growth driver of the environmental industry. This will give a strong boost to China's economy. I hope that friends from relevant businesses, such as auto companies, will enhance cooperation with China in new energy vehicles. More importantly, given its resource and environment constraints, China knows full well that it must follow the path of green and low-carbon development. But this will need a rather long process.

Peter Sands, CEO of Standard Chartered: You mentioned just now that China is expanding opening up and intensifying efforts to integrate into the world economy and global financial market. From my perspective, I have seen rapid development in this field in China. How can the global business community help China get more integrated into the global economy and achieve its reform goals?

Premier Li: The financial sector in China, like its overall development, is getting increasingly open. You may know that not long ago we took the big step of launching the "Shanghai-Hong Kong Stock Connect". It signals further expansion of the RMB offshore businesses. Under this program, Chinese people can invest overseas and foreign companies and individuals can invest in China directly through the stock market. But given China's short history of financial openness and modest international experience, the "Shanghai-Hong Kong Stock Connect", with a limit on its scale, is still in the process of exploration. Nevertheless, responding to the market demand, we are steadily advancing the use of RMB in settling cross-border trade, making cross-border investment and providing offshore financial services. During my visit to Switzerland, the Chinese and Swiss governments will sign an agreement on setting up an RMB clearing bank in this international financial center of Switzerland. China will phase in a global RMB clearing framework in light of its capability, experience and needs of the global markets. The two governments will also sign an agreement on China providing Switzerland with 50-billion-yuan quota of RQFII. I believe that with the growth of RMB offshore businesses, China's financial sector will be more open and we will gain more experience in this process. Our aim is to facilitate the development of China as a major developing country, maintain stability of the global financial system, and meet the need of reforming the global financial system and market development.

Klaus Kleinfield: I know that many of them have more questions for you, but we have run out of time. I hope we could continue the conversation at the Summer Davos in Dalian.

Premier Li: Certainly.