Xi Jinping

Beijing's leaders pledge to maintain growth and push on with reforms

Despite warning of 'downward pressures' on economic performance, top-level conference agrees to set up panel to push on with reforms

PUBLISHED : Friday, 13 December, 2013, 11:42pm
UPDATED : Saturday, 14 December, 2013, 2:55am

The Beijing leadership has vowed at a key annual conference to maintain reasonable and healthy economic growth next year while controlling local debt risks as the government deepens fiscal and financial reforms.

The four-day Central Economic Work Conference, which lasted longer than usual and ended yesterday, stressed the nation still faced "downward pressures" next year while uncertainties in the global economic situation remained great.

The mainland experienced its slowest annual economic growth since 1999 last year.

The conference was attended by President Xi Jinping and all Politburo members, as well as leaders from government departments and local authorities.

The post-conference statement mentioned that a high-level panel to push for reforms will be overseen by the Politburo and its standing committee.

At the local level, all regional authorities were also urged to set up their own institutions to oversee reforms, the statement issued after the meeting said.

Such a framework to oversee reform was decided at the party Central Committee's third plenum last month, where leaders vowed to set up a top decision-making system to co-ordinate actions between different government agencies and local authorities in order to resolve any possible conflicts of interest.

The meeting outlined six key economic tasks for next year, starting for the first time with the need to safeguard national grain supplies, suggesting that agricultural development will be made a priority.

The leaders did not specify an economic growth target for next year in the statement reported by state media. They said the focus would be on striking a balance between "keeping continued healthy development and growth in gross domestic product".

The statement said: "We have to clearly realise that the economic operation still faces downward pressures, with serious overcapacity problems seen in some industries."

The economy still faced "prominent structural problems in jobs, [a] deteriorating … environment, worrying food and drug quality, and an unsatisfying social security situation", it said.

Premier Li Keqiang said last month economic growth of 7.2 per cent was needed to keep a lid on unemployment. On Monday, the official China Securities Journal said the central government was likely to retain this year's 7.5 per cent target in 2014.

Researchers remain split on whether Beijing may trim the target. Minsheng Securities chief economist Guan Qingyou said in a webcast that the emphasis on stable economic growth and social stability indicated a "relatively great likelihood" that the GDP target would be kept at 7.5 per cent. But Chi Fulin , executive president at the China Institute for Reform and Development, said Beijing may lower the target to 7 per cent.

"If the services sector can get a boost through reforms, China would still be able to generate about 10 million new jobs annually, even with a lower economic growth rate," Chi said.

The world's second-largest economy is widely forecast to meet or exceed the GDP growth target this year after growing by 7.8 per cent last year.

Leaders vowed to maintain a proactive fiscal policy and prudent monetary policy next year, improve structural tax cuts, keep "reasonable growth" in credit supply and social financing, and push forward with interest rate liberalisation and yuan reform.