Seeking to halt the down-slide of the Chinese economy, President Xi Jinping today pressed for reforms, innovation and a decisive role for the markets, so as not to let the world’s second largest economy slip below 6.5 per cent targeted growth.
“Reform and development have achieved a high degree of integration. Further development needs to be based on reforms while progress in reforms gives a strong impetus for development,” Xi said during the 18th meeting of the central leading group for comprehensively deepening reform.
The spirit of reform and innovation must be strengthened and the country’s governance system shall be modernised, Xi, who also heads the leading group said.
Last week, a key leadership meeting of the ruling Communist Party of China (CPC) announced a comprehensive proposal for the country’s development over the next five years starting 2016.
At the meeting, Xi directed officials to ensure that annual growth of world’s second largest economy should not be less than 6.5 per cent, putting for the first time a minimum benchmark for the slowdown to avert a free fall as China unveiled its new five year plan focusing on stable economic growth to escape middle income trap.
The directive came as Q-3 growth slipped below the seven per cent for the first time since 2009 causing uncertainty at home and abroad about the future course of the economy.
To realise the goal of doubling the 2010 GDP and per capita income of both rural and urban residents, China must maintain medium-high growth for the next five years.
In its meet today, the leading group emphasised that the market should be allowed to play a decisive role in allocating resources. In addition, China shall open its services sector.
Last week, China has unveiled a guideline for reforming management of the country’s colossal state-owned assets valued around USD 15.7 trillion as part of the new policy.
The guideline approved by the cabinet specifies plans to establish investment firms to manage state-owned capital and restructure state-owned enterprises (SOEs).
The new reform is regarded significant as China has about 150,000 SOEs, which hold more than 100 trillion yuan (USD 15.7 trillion) in assets and employ over 30 million people.
However, they posted an 8.2-per cent decline in profits in the first three quarters of this year.
The reforms were also called for China’s foreign trade, which dropped nine per cent year on year to 2.06 trillion yuan (USD 325 billion) in October, the eighth consecutive monthly decline, state-run Xinhua news agency reported.
Exports dropped 3.6 per cent to 1.23 trillion yuan and imports plunged 16 per cent to 833 billion yuan.
China will attach greater importance to the quality rather than quantity of its foreign trade, with the aim of becoming an international trading powerhouse, a statement issued after the meeting said.