President Xi Jinping announces 'new era' in China's economy in epic three-hour speech to Communist party congress

 
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Xi Jinping spoke for more than three hours (Source: Getty)

President Xi Jinping today hailed a “new era” in the Chinese economy as he delivered an epic three-hour speech at the crucial Communist party congress.

China will become a “great modern socialist country”, Xi told the 2,287 delegates representing the country’s political elite, according to state-run news mouthpiece Xinhua.

The congress – the 19th of its kind – has attracted intense scrutiny from foreign policy analysts and economists from around the world who are keen to see how the country’s leadership presents a vision for the next five years.

However, Xi signalled bolder ambitions with a plan for the period from 2020 until 2050, split into two 15-year chunks. He said China will first try to achieve “socialist modernisation” followed by a “prosperous, strong, democratic, culturally advanced, harmonious, and beautiful” nation by the middle of the century, according to Xinhua.

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The main challenge facing the Chinese economy is the balance between “unbalanced and inadequate development and the people's ever-growing needs for a better life”, Xi said, a change from a previous focus on economic growth foremost.

The speech was a “confident” show of strength from Xi, according to Societe Generale economists Wei Yao and Claire Huang.

In a note they said: “Our first impression of the speech is that the leadership is as confident as ever that China’s unique socialist model will help bring a great rejuvenation of the Chinese nation.”

The strident tone suggested Chinese authorities may not act to rein in its debt-laden state-owned enterprises, said Chris Scicluna, an economist at Daiwa Capital Markets, with “relatively few comments that would suggest a re-energised push for more market-based reform”.

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Freya Beamish, an economist at Pantheon Macroeconomics, said: “The stance on state-owned enterprises is concerning to us.”

She said: “Xi reiterated his call for a ‘stronger, better, bigger’ state-owned sector. Stronger and better are obviously good but a bigger state-owned sector, either in terms of the size of individual firms or the size of the overall sector as a proportion of GDP seems like a backward step to us.”

Xi also announced a “Thought on Socialism with Chinese Characteristics for a New Era”. The inclusion of the “thought” in the Communist party constitution by the end of the congress would put Xi’s leadership on a par with that of Mao Zedong, the autocratic leader who died in 1976.

Xi also said China will “only become more and more open”, in an indirect swipe at protectionist policies such as those espoused by US President Donald Trump. He said the government would ease access to the market for foreign investors.

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