BEIJING: President Xi Jinping stamped his authority over
China’s economy at a major meeting ending on Wednesday, which called for
“reasonable” credit expansion, increased imports and more open markets
and efforts to curb noxious pollution.
The pledges were
made under a new banner, “Xi Jinping Thought on Socialist Economy with
Chinese Characteristics for a New Era”, at the end of the annual Central
Economic Work Conference, during which leaders review past policy and
plan for the upcoming year.
Xi is already seen as China’s
most powerful leader since Mao Zedong. The clear expansion of his
portfolio into economics ─ once seen as the purview of the country’s
premier ─ is the latest sign of his ever-growing power.
The outcome of the three-day closed-door meeting was published by the state news agency Xinhua.
The
report outlined China’s new economic direction under Xi, building on
his declaration at a party congress in October that the country must
shift from an era of high-growth to high-quality development.
The
economy is rebalancing away from the investment-heavy and
export-dependent model that brought four decades of breakneck economic
growth but left the country heavily in debt.
Though many
analysts believe China’s debt-dependent growth has reached a breaking
point, Xinhua’s report on the meeting noted no new projects to tackle
the problem.
Instead the meeting called for continued credit expansion.
“The floodgates of monetary supply should be controlled, and credit and
social financing should see reasonable growth,” Xinhua reported.
The
report did call for measures to tackle financial risk, but the
apparently permissive credit policy flies in the face of increasingly
dire warnings from foreign economists.
In October the
International Monetary Fund warned that China’s dependence on debt was
growing at a “dangerous pace” and it must act to avert a brewing crisis.
Xinhua’s report on this week’s meeting made no mention of an official growth target for the year.
But earlier on Wednesday a state think-tank forecast growth slowing to 6.7pc in 2018, from 6.8pc this year.
Boosting imports
The drive to boost imports and open China’s market further could damp down a brewing trade conflict with the United States.
“China vows to increase imports and cut import tariffs for some products to promote balanced trade,” Xinhua reported.
The
meeting also stressed the need to “expand opening up to the outside
world” and “substantially expand market access”, it said.
Economic relations have been a particularly thorny issue under US President Donald Trump.
His
administration has launched a record number of trade investigations of
Chinese goods and added new tariffs to Chinese-made imports like
aluminium foil and plywood.
The import drive is also a
nod to the need to get China’s consumer class to start spending at home.
The meeting noted that the country boasts the world’s largest middle
class.
Xi has indicated he is willing to accept lower
growth as China tackles financial risk and heavy pollution, with
analysts saying he emphasised the point by leaving growth targets out of
his speech to party delegates in October.
“The key
points are to win the battle for a blue sky, adjust the industrial
structure and eliminate lagging production capacity,” Xinhua said.
This
winter China took the first steps in that direction, requiring steel
factories and smelters to cut production -- with some running at half
capacity -- in a drive to clean up the notoriously severe winter smog.
The measure, among others, has dented industrial output but given the capital a string of blue-sky days.
Along
with pollution and imports, the government aims to control financial
risk, encourage renting in the housing market, reduce poverty and
protect private enterprise.