Chinese Vice Premier Ding Xuexiang used a speech to global executives to reassure participants that China would continue to open up as international companies increasingly complain of market-access challenges.
(Bloomberg) — Chinese Vice Premier Ding Xuexiang used a speech to global executives to reassure participants that China would continue to open up as international companies increasingly complain of market-access challenges.
“Opening to the outside world is a national policy, it is a mark of modern China,” Ding said at the annual China Development Forum in Beijing on Sunday during a keynote speech. He also read a message from President Xi Jinping, in which the Chinese leader pledged to continue to pursue a mutually beneficial opening-up.
China’s economy has rebounded since dropping Covid Zero restrictions, with consumer spending, industrial output and investment all climbing in the first couple months of the year.
The recovery in domestic demand is especially important to Beijing, which is counting on consumer spending to help it reach an economic growth target of about 5% this year. The country needs to counter other risk factors, including falling exports, a still-weak property market and shrinking government resources for large fiscal stimulus.
Ding, 60, was Xi’s chief of staff until recently, and prior to that he held various roles in the Shanghai government, including secretary of the city’s political and legal committee. A graduate from a mechanical college’s technology program, Ding spent the early days of his career as a researcher with the Shanghai Research Institute of Materials, and served as its director in late 1990s.
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China’s Finance Minister Liu Kun said at the forum that “while there are some blockages in the operation of the domestic economy, the fundamentals of economic resilience and potential are unchanged,” without elaborating on the specific issues.
Liu also said China would “appropriately” expand fiscal expenditure and further increase transfer payments from the central government to local administrations.
China has indicated it would refrain from massive fiscal stimulus to boost the economy in 2023 partly due to mounting debt risks faced by local authorities. Rather, the government would rely on a post-Covid rebound in consumption to underpin growth.
The American Chamber of Commerce in China said in a report earlier this month that for the first time in about 25 years China is not a top three investment priority for a majority of US firms, with geopolitical tensions and domestic economic issues driving businesses to focus elsewhere.
“A year ago, 60% of companies said China was the top or a top 3 investment priority and this year that’s fallen to 45%,” Michael Hart, president of AmCham in China, said earlier this month. “China is falling in the rankings as a place for people to invest globally. It’s still important but not one of the top destinations for the majority of companies.”
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–With assistance from Fran Wang and Colum Murphy.
(Updates with comments from Chinese Finance Minister from sixth paragraph.)
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