Xi says China economy is ‘resilient,’ will deepen global links

Xi Jinping said China’s economy is “resilient” and vowed to deepen economic ties with other countries as he began a third term as head of the country’s ruling Communist Party.

“China cannot develop in isolation from the world. The world’s development also needs China,” Xi said, addressing an audience of Chinese and overseas journalists after the close of the party’s congress.

The twice-a-decade event came at a time of heightened concern about the world’s second-largest economy, where growth has been hit by strict Covid-19 controls and a deep property market slump.

Xi tried to allay those concerns by referring to the country’s long-term growth prospects. “Currently the Chinese economy is resilient. Economic potential is ample. There is large room to maneuver,” he said. “Long-term sound economic fundamentals won’t change.”

“Just as China cannot develop in isolation from the world, the world needs China for its development.”

Xi Jinping outlines his economic agenda for the next five years as the US threatens to cut it off from key technologies https://t.co/HlLbqfu4pQ pic.twitter.com/a5k5MQWrPT

— Bloomberg (@business) October 23, 2022

At the party congress, Xi has pushed for the “dual circulation” policy — an attempt to insulate China from economic shocks and US sanctions — while maintaining strategic trade and investment links with the rest of the world. Xi emphasised the latter part of this approach in his comments to reporters, saying that the country’s economic opening “will only be wider.”

Xi also promised changes to economic policy aimed at improving growth, without giving specifics.

“We will firmly fully deepen reform and opening up, firmly push forward high-quality development,” he said.

Bloomberg Economics estimates that China can grow at about 4.6% annually over the next decade, if already announced reforms like raising the pension age and relaxing residency restrictions in cities are continued.

Xi’s recent predecessors as party chief stepped down after serving two five-year terms, but the outcome of the congress means Xi should remain in the top post until at least 2027. He is expected to appoint long-time associates to key economic posts in the government next year.

Xi’s brief remarks to the press included a call for China to achieve “Chinese-style modernisation,” referring to an effort to achieve high-income status without following the economic and political policies seen in advanced economies.

In his report to the party congress last week, Xi emphasised that economic development was the party’s “top priority,” but added that development needs to be balanced with national security. The focus over the next five years will be on developing strategic technologies and limiting inequality, he added.

© 2022 Bloomberg