On Sept 4 and 5, Premier Li Keqiang visited Changzhi and Linfen, two cities in North China’s Shanxi province, urging local governments to upgrade the economy and improve people’s lives by fighting poverty.

At Shigejie coal mine of Lu’an Group in Changzhi, where a 90-year-old State-owned mine has been sealed, he said backward capacities should be cut with no hesitation in order to free up more space for high-quality capacity. “Backward capacities should be prevented from rebirth, as the price of coal rebounds,” he said.

He visited some families of workers who were transferred to other jobs due to the capacity cut and asked them about their new jobs, their wages and their government subsidies.

He said capacity can be backward but not the labor force. “People are the most precious wealth.”

Miners have greatly contributed to the country as they work all year down in the pit, so the government promises that they will not be laid off, he said.

He appreciated Lu’an Group for its measure to re-employ redundant workers by transferring their jobs within the company. He also encouraged the company to develop non-coal businesses and to facilitate workers to start their own businesses.

“We cut backward capacity today for a brighter tomorrow,” the Premier said.

Bumping along rough roads in the Taihang mountain area, the Premier visited residents at a local village and checked crops on a mountain hill. Chatting with villagers, Premier Li inquired about their daily food and drinking water, medical reimbursement and incomes.

He urged local officials to pay great attention to poverty alleviation by taking more practical and detailed measures.

At a local clinic, he was told that a medical partnership has been formed, through which patients can be transferred to hospitals at county level while receiving guidance from higher-level hospitals. The Premier then checked the great variety of drugs at the clinic.

He said he was pleased to see that medical reform is benefiting people at the grassroots level.

“Village doctors should be the first defense for local residents’ health,” he said, “to prevent villagers from being forced into poverty by disease.”

At the Weimeinuo Makerspace, Premier Li spoke highly of the model that integrates research and production, providing comprehensive services to micro and small-sized manufacturers, such as providing workshops, financing and sales.

“A great mass of small companies can achieve greatness,” he said. “Each enterprise in this makerspace has its own strength. Combined, they will stimulate innovation and create abundant market and social value.”

After observing some creative work being done there, he said talented people can come up with small innovations to solve big problems. The strategy of mass entrepreneurship and innovation will stir up creativity to adapt to the market, providing a strong driving force to economic upgrades.

The Premier also stopped at a factory in Linfen of the Taiyuan Iron & Steel Co, where he heard a report about the moves of the company in weeding out backward capacity and Shanxi province’s reform of State-owned enterprises.

The Premier was informed through the report that all the laggard capacity has been eliminated, more than 10,000 workers have transferred to other jobs, and over a quarter of them chose to start their own business.

“Eliminating laggard overcapacity is vital for supply-side reform, which should be firmly pushed forward,” the Premier said.

He also said that social capital can be introduced in merger and reorganization of enterprises, and companies should produce high-end products with less staff and higher efficiency.

“Some staff may be a burden in companies with backward capacity, but they can exert their talent to create more wealth if transferred to other companies,” the Premier added.

At Huaxiang Group, the private company head introduced their main business of providing specialized components for domestic and foreign clients, their innovation strategy and customized production.

Premier Li talked with technicians at the company and learned that senior technicians have been receiving good salaries and big rewards there, with highest annual salary being four times that of the general manager. The Premier highly praised the move, saying that for innovation-driven development strategy, talent is the first element.

Not only small and middle-sized companies but also big ones can cultivate creativity and improve competitiveness through innovation strategy, he added.

He encouraged senior technicians to develop the craftsmanship spirit in efforts to increase the competitiveness of made-in-China products both in value and quality.

During the inspection tour, the Premier highly praised the economic and social achievements in Shanxi and expressed hope that the province will continue to implement new development concepts, expand reform and innovation, and accelerate the transfer of new and old economic growth drivers in order to secure steady growth of the economy and improve people’s lives.

State Councilor Yang Jing also joined the inspection.