Xi Jinping

China must sacrifice faster growth for reform, Xi tells Apec summit

President reassures leaders at Apec summit he is 'fully confident' in economy despite slowdown

PUBLISHED : Monday, 07 October, 2013, 8:48pm
UPDATED : Tuesday, 08 October, 2013, 3:53pm

President Xi Jinping has reassured Asian business and political leaders that China's economic growth remains healthy and robust despite its recent slowdown.

Xi told a conference on the sidelines of the Asia-Pacific Economic Co-operation forum that Beijing was willing to sacrifice the pace of growth for structural economic reform.

But he said the country could not afford to make "fundamental mistakes" and would introduce reform in a systematic way.

"Any such mistakes will be beyond rectification," Xi said. "We must be bold enough to explore and make advances, but sufficiently prudent and careful in planning our action."

His comments came ahead of next month's Communist Party plenum, which is expected to roll out his administration's reform programme.

Xi said the slowdown was a result of "controlled adjustments" and that the Chinese leadership did not fear that the economy was heading for a hard landing.

Economic growth pulled back in the first half of the year to 7.6 per cent, from 9.3 per cent in 2011 and 7.7 per cent last year.

But Xi said annual economic growth of 7 per cent was enough to achieve the goal of doubling both GDP and per capita income by 2020.

"Everything is within our expectations and there are no surprises," he said.

Xi said China was aware of the challenges resulting from the country's weakened demand, excessive production capacity, local government debts and shadow banking, as well as the impact from the global economy.

He said hesitation about reforms would not only lead to failure, but jeopardise earlier gains. "China must undergo structural reforms even though it will sacrifice faster growth," Xi said.

But he acknowledged China "cannot afford drastic mistakes on issues that are fundamentally important". At the closed-door summit session yesterday, Xi said China was open to all regional economic integration initiatives.

"Any [integration] arrangement should lead to a cooperative relationship, not a confrontational one, an open mindset, not an exclusive one," he said.

Raymond Yeung, China economist of ANZ Bank, said Xi's message was intended to allay fears among Asian countries about China's economic prospects.

"It is important for President Xi to make such reassurances because China does not want to be left out when some nations in the region are negotiating with the United States for a transPacific trade partnership. China needs to send a message that it can co-operate with the region," he said.

Beijing-based political commentator Zhang Lifan said that while the Chinese leadership would continue to pursue economic reform, political reform was unlikely.

"By stressing 'avoiding mistakes on fundamental issues', Xi means that the context of all reforms is that the power of the Communist Party will not be shaken," Zhang said.

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