BEIJING, China – Chinese leaders warned Friday that the world’s second-largest economy faces “downward pressure” and called for boldness in carrying out promised reforms aimed at reviving slowing growth.
In a report issued after an annual planning meeting, the Communist Party cited an array of problems, possibly trying to stir urgency about carrying out sweeping reforms promised last month in a long-range development blueprint.
There was no immediate word on whether the meeting set a growth target for next year. Investors and analysts were watching to see whether the party would cut its target from this year’s 7.5 per cent.
The statement cited a glut of unneeded production capacity in some industries, environmental degradation and concerns about the quality of food and drugs.
“We must clearly recognize there is downward pressure on the economy,” the statement said. “The thoughts should be bold and the steps should be firm in carrying out reforms and the people should have real benefits.”
Chinese leaders are under pressure to overhaul a growth model based on exports and investment that has run out of steam after delivering three decades of rapid growth.
The plan last month promised China’s more dynamic entrepreneurs a bigger role but said state industry would remain the core of the economy, a move some analysts warn could drag on growth.
Economic growth declined over the past two years, hitting a two-decade low of 7.5 per cent in the three months ending in June before rebounding to 7.8 per cent in the latest quarter. Analysts have warned growth might slow again in the current quarter or early 2014.
Last month’s plan outlined changes intended to make industries more efficient and productive by injecting more competition. That might threaten politically favoured state companies that benefit from cheap credit, land and other resources, prompting a backlash from their allies in the party for whom they provide revenues and jobs to reward supporters.
Few details of how that plan will be carried out have been announced.
Friday’s statement, carried on the website of state radio, said next year’s top priority will be protection of “national food security.” It said that would include improving farm production and food quality and safety.
It promised to increase supplies of affordable housing, to improve conditions for private investment and to strengthen environmental protection, but gave no details.
The statement said resolving multibillion-dollar debts owed by local governments will be an “important task.” The size of such debts, which the National Audit Office put last year at 10.7 trillion yuan ($1.6 trillion), has prompted concern that state banks might be in trouble if borrowers default.
The statement said Beijing expects the global economy to recovery gradually next year. But it said the world faces possible instability and that a new source for growth is unclear.