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Despite Slump, China’s Xi Jinping Pledges Economic Reforms

Sep 22 , 2015

BEIJING—Chinese President Xi Jinping defended his government’s economic stewardship and said that China’s slowing growth and market fluctuations won’t deter needed reforms.

In his first interview with foreign media since Chinese stocks skidded this summer, Mr. Xi told The Wall Street Journal that this summer’s government intervention to arrest the plunge was necessary to “defuse systemic risks.” The rescue was akin to acts taken by governments in “some mature foreign markets,” the president said in written responses to questions submitted by the Journal ahead of his first official state visit to the U.S.

On the slowdown that has appeared sharper than both global markets and Beijing expected, Mr. Xi urged foreign investors to take the long view and compared the world’s second-largest economy to a vessel in rough seas.

“Any ship, however large, may occasionally get unstable sailing on the high sea,” he said.

Mr. Xi, who starts his visit in Seattle on Tuesday, played down differences that have unsteadied relations with the U.S., including cybersecurity and China’s island-building in the South China Sea, saying China isn’t militarily adventurous and wants to work with Washington to address world challenges. Added to the agenda in recent weeks for Mr. Xi’s summit with President Barack Obamaare concerns about China’s wobbly economy—and whether that’s dented the leadership’s appetite for economic liberalization.

So far, with China’s manufacturing-driven growth model flagging, the shift to consumer spending and services that the government is trying to engineer hasn’t picked up the slack.

Mr. Xi sought to dispel any concern that China is faltering in its transition toward more sustainable growth: “Like an arrow shot that cannot be brought back, we will forge ahead against all odds to meet our goals of reform.”

On another move that surprised global markets—a nearly 2% devaluation of China’s currency that fueled concerns about capital flight—Mr. Xi said the reduction in foreign reserves that followed is normal “and there’s no need to overreact to it.”

The lead-up to summits between the U.S. and China have become fraught in recent years, as have overall relations, as Beijing, particularly under Mr. Xi, has vigorously sought to use the country’s economic, military and diplomatic clout to further its increasingly global interests. Calls are rising for the Obama administration to develop better strategies to neutralize a more assertive China.

Still, Messrs. Xi and Obama have used their past summits to project a workmanlike relationship in public, despite friction in their behind-the-scenes discussions.


Copyright: The Wall Street Journal

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