THE financial risks China faces are “not that scary”, President Xi Jinping (習近平) said on 8 November as leaders of the world’s second-largest economy look to transition from decades of super-charged growth to more sustainable expansion.
China’s gross domestic product expanded at its slowest pace in five years in the third quarter, but Xi said the economy has entered a “new normal” that will be more beneficial to the country and the world in the long run.
“Some worry whether China’s economic growth rate will fall further and whether it can overcome difficulties,” he said in a speech opening an Asia-Pacific (亞太) business meeting in Beijing (北京). “There are indeed risks but they are not that scary.”
Xi said the economy is becoming driven more by domestic consumer demand, as long advocated by economists, and away from an unstable dependence on investment and foreign trade, avoiding “external risks”. Job creation and personal income are growing, he said, and inflation is under control.
But China’s economy, a key driver of global growth, is suffering from a deflating property bubble, a crackdown on corruption blamed for curbing some business, and weak demand from Europe.
Authorities have responded with limited stimulus measures to promote growth.
Xi was speaking at a gathering of business and political leaders from the Asia-Pacific Economic Cooperation (APEC) region, which includes 40 percent of the world’s population, almost half its trade and more than half its GDP.
“For Asia-Pacific and the world at large, China’s development will generate huge opportunities and benefits and hold lasting and infinite promise,” Xi said.
But he added: “We are also certainly aware that the new normal is accompanied by new challenges and new problems. In fact, some potential risks are already emerging.”
Xi did not elaborate.
Xi noted that it will be impossible for China’s economy, now number two globally after the United States, to continue growing at its previous pace, which regularly saw double-digit growth for about three decades.
APEC finance ministers last month warned of increasing ‘downside risks’ to the global economy, after China’s growth data came out.