China faces “unimaginable” perils and dangers ahead and must rely on Communist Party rule and economic reform to sail through them, Chinese President Xi Jinping said in one of the most watched speeches of his leadership in Beijing on Tuesday. Speaking at the Great Hall of the People to mark the 40th anniversary of the country’s reform and opening up, Xi did not directly address the specific challenges facing the world’s second biggest economy or touch on sensitive issues such as the ongoing trade war with the US. Instead, Xi spent much of the hour-and-a-half speech drawing general conclusions about China’s economic and social development in the past four decades since Deng Xiaoping, China’s former paramount leader, started to embrace market-oriented changes in China. The No 1 lesson China can draw from the 40 years of success is that the country must stick to the leadership of the Communist Party, Xi said. China tightens control of local economic data ahead of expected weak growth next year “The practices of reform and opening up in the past 40 years have shown us that the Chinese Communist Party leadership is the fundamental character of socialism with Chinese characteristics … east, west, south, north, and the middle, the party leads everything,” he said. “Every step in reform and opening up will not be easy, and we will face all kinds of risks and challenges in the future and we may even encounter unimaginable terrifying tidal waves and horrifying storms,” Xi said. “Only by improving the party's leadership and governance … can we ensure the ship of reform and opening up will sail forward.” Xi’s speech was delivered as prospects for China’s growth are clouded abroad, by rising rivalries between China and the US, and by a deepening economic slowdown at home. Xi, who is now legally entitled to retain his presidency beyond 2023 after a constitutional amendment in March this year, needs to convince domestic and foreign audiences that Beijing remains committed to the economic liberalisation process that was started by Deng 40 years ago. The stock indexes of Shanghai and Shenzhen, which had both risen in early trading in anticipation of possible policy announcements, retraced their declines soon after proceedings began. Shanghai’s composite index fell as much as 1.2 per cent, while Shenzhen’s index fell as much as 1.5 per cent to an eight-week low. On the Hong Kong exchange, the Hang Seng Index fell 0.9 per cent while the H-share index declined 1.3 per cent. Stocks slide as Xi refrains from kick-starting China’s sagging growth Xi stressed that China would stick to its own chosen path, namely socialism with Chinese characteristics. “To push forward reform and opening up in a country with 5,000 years of civilisation and a population of 1.3 billion, there are no textbooks containing golden rules or teachers who can be arrogant to the Chinese people,” he said. Xi quoted the renowned Chinese author Lu Xun, who asked, “what's a road? A trodden path in a place where there was previously no road, and a passage opened from a place where there were only thorns.” How a generation climbed China’s social ladder through 40 years of luck, talent and economic growth Xi opened his speech by saying the Cultural Revolution, from 1966 to 1976, had brought China's economy to the brink of collapse and went on to quote Deng, saying “China's modernisation and socialism will be buried if we do not embrace reform and opening up now.” He made it clear that Beijing would not abandon its road as China's developmental achievements in the past four decades had proven the “vivid vitality” of China's “scientific socialism”. “For those that ought to be changed or can be changed, we will change; but for those that shouldn't be changed or cannot be changed, we will firmly not change,” Xi said. In international relations, Xi reiterated Beijing’s existing line that China would not seek hegemony, but he did not mention the US specifically. Xi said China was walking closer to the world’s centre stage and was now “an internationally recognised” builder of world peace, a contributor to global development, and a keeper of international order. China, he said, had contributed “China wisdom, China solutions and China power” to world peace and development. The Chinese president said China would play its role as “a big responsible country” to support developing countries and to take part in global governance. “China will never grow at the cost of other countries' interests but will never give up its legitimate rights and interests … China's development does not pose a threat to any other country. No matter how far China develops, it will never seek hegemony,” Xi said. How China’s ‘reform and opening up’ transformed poor families into middle-class shoppers In a long list of China's economic and social achievements of the past four decades, Xi said China had achieved an annual average growth in GDP of 9.5 per cent since 1978, and contributed more than 30 per cent towards total global economic growth for many years. China, he said, was now the world's second largest economy, the world's biggest manufacturing country and the world's No 1 commodity trading country. Bureaucracy still hampers academic research in China 40 years after opening up In terms of ideology, Xi said China would stick to its official ideology, namely Marxism, Leninism, Mao Thought, Deng Xiaoping Theory, Three Represents theory, scientific development concept and his own “Theory of Socialism with Chinese Characteristics in the New Era”. In terms of economic policies, Xi reiterated the policy that China would support public ownership while offering “unswerving” support to non-state sectors.