China President Xi Jinping has emphasized the importance of free markets in the country’s economic reforms, state media said yesterday, another indication that the government is persevering with plans to bring about sweeping changes.
Allowing market forces to allocate resources would mark a new stage of growth in the world’s second-biggest economy, Xinhua news agency said Xi told the Politburo on Monday.
As part of plans to alter the economy and reduce dependence on exports and state investment, Beijing unveiled in November its most ambitious plan for change in 30 years that would allow free markets to have a bigger role.
The key question is how to handle the relationship between the market and the government, Xi told the Politburo, an elite body made up of the country’s 25 most powerful leaders.
China, he said, had to reduce the amount of resources directly allocated by the government and cut the amount of direct state intervention in micro-economic activity. Remaking China’s growth engine is one of the most important jobs faced by Xi’s government, which is under pressure to produce results before some leaders retire at the next change in leadership in 2017.
But change has been made trickier still by China’s slowing - and maturing - economy, which is expected to cool to a 24-year-low in growth of 7.3% this year.
