No way out for China other than to deepen reforms: Xi Jinping
Beijing: China has "no way out" but to deepen reforms in major areas to surmount the institutional barriers that are restraining growth, Chinese President Xi Jinping said as the world's second largest economy continued to slowdown.
"China must break the barriers from entrenched interest groups to further free up social productivity and invigorate creativity," Xi said while hailing reform and opening up as the source of China's progress in recent decades.
"There is no way out if we stay still or head backward," he said at a conference in central Hubei province attended by senior officials from a number of provinces.
China's second quarter GDP slid down to 7.5 per cent with projections that the growth could go down below seven this year as the country struggled to convert the predominantly export-based economy to that of the one based on domestic consumption.
The country for the first time in decades faced the prospects of missing the official target, set at 7.5 per cent this year.
Chinese authorities have so far refrained from initiating a massive stimulus programme to lift the economy to allow leeway to proceed with structural reforms for long-term benefit.
The areas Xi pointed to as needing more thorough research include the fostering of a more market-oriented mechanism, enhancing government efficiencies, boosting social harmony and innovation, safeguarding social justice, as well as improving the Communist Party's governance, state-run Xinhua news agency reported yesterday.
Since taking office in March, China's new leaders have repeatedly pledged to upgrade the economy through deeper reforms, including delegating administrative power to lower levels and easing controls in the financial sector.
Last week, China's central bank decided to lift controls on bank lending rates, in a clear signal of the government's determination to push forward market-oriented reforms.
But at the same time, Xi, regarded as the most powerful leader, taking over as President, Communist Party Chief and head of the Army this year, avoided any references to political reforms to loosen the 64-year-old controls of the Party over the state apparatus.
Instead he launched campaigns against corruption as well as to foster austerity in the governance and in the military banning luxury dinners and vehicles.
The government yesterday clamped a five-year ban on all new constructions in China as part of austerity campaign.