BEIJING (AFP) ― The financial risks China faces are “not that scary,” President Xi Jinping said Sunday as leaders of the world’s second-largest economy look to transition from decades of super-charged growth to more sustainable expansion.
China’s gross domestic product expanded at its slowest pace in five years in the third quarter, but Xi said the economy had entered a “new normal” that will be more beneficial to the country and the world in the long run.
“Some worry whether China’s economic growth rate will fall further and whether it can overcome difficulties,” he said in a speech opening an Asia-Pacific business meeting in Beijing.
“There are indeed risks but they are not that scary.”
Xi said China’s economy is becoming driven more by domestic consumer demand, as long advocated by economists, and away from an unstable dependence on investment and foreign trade, avoiding “external risks.”
China’s President Xi Jinping waves at the Asia-Pacific Economic Cooperation Summit at the China National Convention Center in Beijing on Sunday. (AP-Yonhap)
Job creation and personal income are growing, he said, and inflation is under control.
But China’s economy ― a key driver of global growth ― is suffering from a deflating property bubble, a crackdown on corruption blamed for curbing some business, and weak demand from Europe.
Authorities have responded with limited stimulus measures to promote growth.
Xi was speaking at a gathering of business and political leaders from the Asia-Pacific Economic Cooperation region, which includes 40 percent of the world’s population, almost half its trade and more than half its GDP.
“For the Asia-Pacific and the world at large, China’s development will generate huge opportunities and benefits and hold lasting and infinite promise,” he said.
But he added: “We are also certainly aware that the new normal is accompanied by new challenges and new problems. In fact, some potential risks are already emerging.”
Xi did not elaborate.
Leaders from APEC’s 21 member economies, including U.S. President Barack Obama, will hold a two-day summit beginning on Monday.
Xi noted that it would be impossible for China’s economy, now No. 2 in the world after the United States, to continue growing at its previous pace, which regularly saw double-digit growth for about three decades.
The summit is expected to end with a joint communique on Tuesday reiterating regional commitments to work toward trade liberalization in the vibrant Pacific Rim.
APEC finance ministers last month warned of increasing “downside risks” to the global economy, after China’s growth data came out, and called for the regional grouping to take the lead in bolstering growth.
