BEIJING (AP) — China’s new Communist Party leaders promised Sunday to be ready to spend more if needed to shore up a shaky economic recovery but gave no sign of plans for major changes.
A statement quoted by the official Xinhua News Agency after an annual planning conference pledged more market-opening reforms in 2013.
The world’s second-largest economy is gradually pulling out of its deepest slump since the 2008 global crisis, but weaker-than-expected November trade data prompted suggestions the rebound might be faltering.
The leadership under party General Secretary Xi Jinping pledged a “proactive fiscal policy” and “prudent monetary policy,” Xinhua said, referring to willingness to boost spending if needed and keep credit easy so long as inflation stays low.
The conference is the first opportunity for the new leaders to announce their own plans for China’s economic course. Most analysts expect them to stick largely to the goals of the party’s current five-year development plan, which runs through 2015.
Xi and other leaders who were installed last month in a once-a-decade handover of power are under pressure to overhaul an economic model based on exports and investment that delivered 30 years of rapid growth but is running out of steam.
The World Bank and other analysts say Beijing needs to curb dominant state companies and promote service industries and consumer spending to keep incomes rising. They say without prompt action, growth might stall, leaving China stuck at middle-income levels.
Companies, investors and political analysts are watching to see how far Xi and others on the seven-member ruling Standing Committee are willing to go to change the state-dominated economy. They face potential opposition from state companies that might be hurt by changes and have influential allies in the party.
“If China does not change its strategy, it risks falling into the ‘middle income trap’,” Robert Zoellick, former World Bank president, said in a speech at a Beijing business conference last week.
Brief reports by Xinhua on Sunday’s statement gave no details of long-term plans but affirmed the new leadership’s commitment to ruling party pledges to promote reform, open markets further and encourage economic efficiency.
The leadership pledged a “proactive fiscal policy” and “prudent monetary policy,” Xinhua said, referring to willingness to boost spending and keep credit easy so long as inflation stays low.
Economic growth fell to a three-and-a-half-year low of 7.4 percent in the three months ended Sept. 30. Factory output, consumer spending and other indicators are improving in the current quarter but analysts say a recovery is likely to be gradual and too weak to drive a global rebound without improvement in Europe and the United States.
Data last week showed November trade deteriorated sharply following a rebound that started in August. Export growth plunged to 2.9 percent over a year earlier from October’s 11.6 percent. Imports were flat, down from October’s 2.4 percent growth.
Sunday’s statement promised to “fully deepen reforms” and “firmly promote opening up” next year, Xinhua said. The leaders said “enhancing quality and efficiency of economic growth” will be a “central task.”
The leadership pledged to increase domestic demand, though it gave no indication how it will do that.
Companies are under pressure to put more money in consumers’ pockets by raising wages. Other changes require longer-term effort, such as freeing up money in household budgets by raising government spending on schools, health care and other social programs.
Earlier statements by the new leadership suggested they want to narrow China’s yawning and politically sensitive wealth gap between an elite who have benefited from economic reform and the poor majority.
The new party Politburo pledged this month to pursue both economic growth and “social harmony and stability.”
The government is due to release a long-awaited report this month on proposals for policy changes to narrow the wealth gap.
More Related Stories
- Is Pope Francis an exorcist?
- Oklahoma tornado death count at least 91
- Frantic parents search for children in tornado's wake
- Crews dig through rubble after deadly tornado
- 51 killed in massive Oklahoma tornado
- Don't cry climate-change wolf
- Record tornado devastates Oklahoma
- Limbaugh: No one willing to impeach the first black president
- Tornado reduces Oklahoma City suburb to rubble
- AP: Toll at least 37 dead in Okla. tornado
- Entire Midwest on tornado warning
- Oregon senator proposes appeal to Monsanto Protection Act
- Supreme Court to rule on prayer at government meetings
- Beltway scandal machine breaks, knows nothing about America
- Gitmo hunger striker launches Twitter campaign
- "Hero" cop, honored by Obama, accused of double rape
- Father of gay high school student arrested for dating classmate speaks out
- Pentagon adviser pushed Anthrax drug, which his firm produced
- Conservatives A-OK with closeted Boy Scouts
- The new geography of poverty
- Promotion for NYPD cop who cost city $1.5m in settlements
Featured Slide Shows
The week in 10 picsclose X
- 1 of 11
Lisa Montgomery embraces her nephew Thursday after a tornado tore apart her home in Cleburne, Texas. The twister killed six people and destroyed entire swaths of the North Texas town.
Credit: AP/LM Otero
Jack McMahon, the defense attorney for abortion doctor Kermit Gosnell, speaks outside the Criminal Justice Center in Philadelphia Tuesday. His client was convicted of killing three babies in his clinic, and will serve multiple life sentences.
Credit: AP/Matt Rourke
A photo taken Monday captures Vice President Joe Biden's response to a Milwaukee second-grader's innovative proposal to end America's epidemic of gun violence. This guy!
Credit: AP/Jenny Aicher
Sen. Rand Paul, R-Ky., flanked by a grouper-eyed Michele Bachmann, addresses the IRS' admission that it targeted Tea Party groups in advance of the 2012 election. In an op-ed for CNN Thursday, the Kentucky senator slammed the president for his faux outrage.
Credit: AP/Molly Riley
Ousted IRS chief Steven Miller is sworn in on Capitol Hill Friday. Miller testified before the House Ways and Means Committee on the extra scrutiny the agency gave conservative groups applying for tax-exempt status.
Credit: AP/J. Scott Applewhite
Attorney General Eric Holder pauses as he testifies on Capitol Hill before the House Judiciary Committee Wednesday. Holder is under fire, among other things, for the Justice Department's gathering of phone records at the Associated Press.
Credit: AP/Carolyn Kaster
O.J. Simpson sits during an evidentiary hearing at Clark County District Court in Las Vegas, Nev., Thursday. Simpson, who is currently serving a nine-to-33-year sentence in state prison for armed robbery and kidnapping, is using a writ of habeas corpus to seek a new trial.
Credit: AP/Las Vegas Review-Journal/Jeff Scheid
Major Tom to ground control: On Sunday astronaut Chris Hadfield recorded the first music video from space, a cover of David Bowie's "Space Oddity."
Credit: AP/NASA/Chris Hadfield
When it rains it pours. President Barack Obama speaks during a news conference Thursday with Turkish Prime Minister Recep Tayyip Erdogan, inexplicably inspiring an #umbrellagate Twitter meme.
Credit: AP/Jacquelyn Martin
A smoke plume rises high above a road block at the intersection of County A and Ross Road east of Solon Springs, Wis., Tuesday. No injuries were reported, but the the wildfire caused evacuations across northwestern Wisconsin.
Credit: AP/The Duluth News-Tribune/Clint Austin
Recent Slide Shows
- 1 of 11