World Economy

Xi Defends China’s Economic Stewardship

Xi Defends China’s Economic StewardshipXi Defends China’s Economic Stewardship

Chinese President Xi Jinping defended his government’s economic stewardship and said that China’s slowing growth and market fluctuations won’t deter needed reforms.

In his first interview with foreign media since the Chinese stocks skidded this summer, Mr Xi told The Wall Street Journal that this summer’s government intervention to arrest the plunge was necessary to “defuse systemic risks”, Business Spectator reported.

The rescue was akin to acts taken by governments in “some mature foreign markets,” the president said in written responses to questions submitted by the Journal ahead of his first official state visit to the US.

On the slowdown that has appeared sharper than both global markets and Beijing expected, Xi urged foreign investors to take the long view and compared the world’s second-largest economy to a vessel in rough seas.

“Any ship, however large, may occasionally get unstable sailing on the high sea,” he said.

Xi, who starts his visit in Seattle on Tuesday, played down differences that have unsteadied relations with the US, including cybersecurity and China’s island-building in the South China Sea, saying China isn’t militarily adventurous and wants to work with Washington to address world challenges.

Added to the agenda in recent weeks for Xi’s summit with President Barack Obama are concerns about China’s wobbly economy–and whether that’s dented the leadership’s appetite for economic liberalization.

So far, with China’s manufacturing-driven growth model flagging, the shift to consumer spending and services that the government is trying to engineer hasn’t picked up the slack.

  Dismisses Concerns

Xi sought to dispel any concern that China is faltering in its transition toward more sustainable growth: “Like an arrow shot that cannot be brought back, we will forge ahead against all odds to meet our goals of reform.”

On another move that surprised global markets–a nearly 2% devaluation of China’s currency that fueled concerns about capital flight–Xi said the reduction in foreign reserves that followed is normal “and there’s no need to overreact to it.”

The lead-up to summits between the US and China have become fraught in recent years, as have overall relations, as Beijing, particularly under Xi, has vigorously sought to use the country’s economic, military and diplomatic clout to further its increasingly global interests. Calls are rising for the Obama administration to develop better strategies to neutralize a more assertive China.

Still, Xi and Obama have used their past summits to project a workmanlike relationship in public, despite friction in their behind-the-scenes discussions.

  Cooperation With Washington

Xi cited cooperation on pressing global issues, from agreements to reduce emissions linked to climate change and common efforts in negotiating limits to Iran’s nuclear program; rather than supplanting the US, he said, China wants to work with Washington on improving global order, he said.

“I don’t believe any country is capable of rearranging the architecture of global governance toward itself,” he said. He later added: “Facts have shown that the interests of China and the US are increasingly intertwined.”

On issues of contention, however, Xi appeared conciliatory without giving much ground. He said his government treats all businesses fairly and brushed aside complaints by foreign business organizations that regulations are being used to hobble foreign firms, particularly US technology companies, and favor Chinese competitors.

  Pursuit of Reforms

The answers at times glint with the rhetorical flair that has differentiated President Xi from his immediate predecessors and made him popular among many Chinese. His policies having met resistance from vested interests, he vows “to crack hard nuts and ford dangerous rapids” in pursuit of reforms that would rely more on market-based solutions.

Overall, though, he made it clear that the government will maintain firm regulatory hold as it allows markets broader sway in allocating resources. “That means we need to make good use of both the invisible hand and the visible hand,” he said.

“The Asia-Pacific should be a cooperative ground for enhanced China-US coordination and collaboration rather than their Coliseum for supremacy,” Xi said.

Xi offered to extend cooperation to the infrastructure development bank that Beijing founded, joined by US allies like Britain and Germany despite initial objections from Washington. Xi welcomed the US to become a member.

While saying repeatedly that China remains open to foreigners and foreign businesses, he also said that the internet must be carefully regulated to “safeguard the country’s sovereignty, security and development interests.”