In World Economy News 01/01/2016
Chinese President Xi Jinping stressed the need for stable growth and to press ahead on political and economic reforms in 2016, as the world’s second-largest economy expands its role on an international stage.
Xi used his annual New Year’s Eve speech to again emphasize how the country must open up its markets while lifting the lot of its 1.3 billion people, despite an economy growing at its slowest pace in a quarter-century.
“We need to keep pushing forward structural reform as well as opening up, and keep promoting social fairness,” Xi said in the speech aired by China Central Television, adding the need to build a harmonious political environment. “We need to pave the way toward a moderately prosperous society.”
The address marked the end of Xi’s most challenging year since taking power in November 2012. While the Communist Party chief racked up wins such as the yuan’s designation as a global reserve currency, his handling of the stock market crash and the slowing economy raised questions about whether the government was committed to the choices necessary to guide growth lower and ease the economy’s dependence on debt.
Next Year
Xi also established the Asian Infrastructure Investment Bank and worked with U.S. President Barack Obama to forge a global deal to fight climate change. He executed several high-profile state visits including a U.K. tour during which he showed a more-relaxed side.
“China won’t be absent from international affairs,” Xi said. “China will always keep its arms open to the world and will lend a hand to people in difficulties as much as we can. Let’s make our ‘circle of friends’ wider and wider.”
The coming months will clarify the extent of Xi’s success in managing the country’s economic deceleration, amid efforts to streamline bloated state-owned enterprises and confront a rapidly aging workforce.
Delivering robust economic growth has been a key source of the party’s legitimacy for more than three decades, and any further erosion of faith in the ability to maintain that pace risks prompting a more direct challenge to its rule.
The Economy
Economic data should soon confirm whether China achieved the government’s growth target of about 7 percent, the slowest expansion in 25 years. Leaders are seeking at least 6.5 percent annual growth in coming years and they plan to increase the deficit, raising concerns that China still isn’t prepared to confront debt estimated at 280 percent of gross domestic product.
In 2015, Xi widened an ideological clampdown on government critics, even those among the party’s 88 million members. A revised code of conduct for cadres was released in October, that prohibits “improper discussion” of party policies and principles.
In last year’s address, Xi stressed the need to continue an anti-corruption campaign that’s netted more than 100,00 officials, foreshadowing progress on several high-profile case. Guo Boxiong, a retired top general of the People’s Liberation Army, was expelled from the party in July pending prosecution on corruption allegations, while former security chief Zhou Yongkang was jailed for life in June after a secret trial.
