Opening a congress to mark a once-in-a-decade leadership change, President Hu Jintao of China said the country will continue to pursue a boost in domestic demand to spur its sluggish economy, as well as furthering economic reforms and working toward a more market-based yuan exchange rate.
The BBC reported Thursday that Hu, who will be surrendering his position as leader of the Chinese Communist Party to Vice President Xi Jinping, said that for China to make its development “much more balanced, coordinated and sustainable, we should double its 2010 gross domestic product and per capita income for both urban and rural residents [by 2020]“.
He was quoted saying that, for China to hit that goal, it must “increase investment at a proper pace and expand the domestic market.” China’s export economy has suffered due to economic woes elsewhere in the globe, falling to its lowest level in three years, and the government has been working to boost domestic demand to make up for lessened exports.
Hu was quoted saying, “We should step up efforts to transform to a new growth model and work hard to improve the quality and efficiency of the economy.” He added, “We will continue to deepen our economic system reform and stick to the policy of expanding domestic demand.”
Among recent actions in the economic reform arena are additional flexibility granted to Chinese banks on a range of interest rates they can offer consumers; a broader trading range for the yuan against the dollar; and the easing of regulations governing the Qualified Foreign Institutional Investor (QFII) program, allowing QFIIs to hold more shares in the firms listed in China and also to invest in the country’s interbank bond market.
Chinese news agency Xinhua had said Wednesday that the government was considering accelerating the approval of QFIIs to draw more foreign long-term investment to the country.
“Lots has been talked about financial reforms in China over the past decade,” Tony Nash said in the report. Nash, managing director of IHS Global Insight, added, “But one has to wait until the new leaders take charge and start to formulate their policies and communicate them to domestic and international market.”