Xi calls for deeper reform to escape 'grave' economic conditions

[BEIJING] Chinese President Xi Jinping called for a greater push on reforms to stimulate domestic demand and the economy to ride out mounting risks and challenges, saying conditions remain "complicated and grave."

Speaking at a Politburo meeting on economic policy, Mr Xi said China should speed up its "dual circulation" growth model that is primarily driven by domestic demand, while drawing in foreign investment and stabilising trade, the official Xinhua News Agency reported Thursday.

Mr Xi's remarks come ahead of series of high-level political meetings that will chart the development path of the world's second-largest economy. Top current and retired leaders typically spend early August huddled in the resort of Beidaihe to discuss policy direction. The Communist Party's Central Committee will meet in October to outline the next five-year plan and a longer term vision to 2035, Xinhua said.

While Thursday's Politburo meeting kept the overall stance for fiscal and monetary policy unchanged, it added fresh emphasis for policy to be more targeted. It also called for lower financing costs for the real economy and reasonable credit growth.

Chinese policy makers have been trying to avoid the formation of asset bubbles in the stock and property markets as the economy recovers. Thursday's meeting called for more balanced growth, with efforts to boost consumption, make supply chains more stable and competitive, and help young people and migrants from rural areas find jobs.

Earlier this week, Mr Xi said China would be able to ride out the coronavirus pandemic with stronger growth in the second half of 2020.

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"We have strong will, firm determination and solid strength to tackle the challenges, and enough drive, capacity and wisdom to overcome all kinds of risks and tests," he said, according to state broadcaster CCTV. "No countries or individuals can stand in the way of the country's great rejuvenation."

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