Chinese President Xi Jinping said the global economy has entered a period of “profound readjustment” and recovery remains elusive.
The international financial industry is fraught with risks and protectionism is on the rise, Xi said in a speech at the Boao Forum for Asia in the southern Chinese province of Hainan today. Countries are still facing difficulties in adjusting their economic structure and the global-governance mechanism needs improvement, he said.
Policy makers around the world face growing risks of stagnant or slowing growth. Last week alone, the Bank of Japan said it will start unprecedented stimulus to counter 15 years of deflation, data showed U.S. employers added the fewest workers in nine months and European Central Bank President Mario Draghi said the institution is prepared to cut interest rates if the economy deteriorates further.
“Achieving common development for all countries remains an uphill battle,” Xi said. “Rather than undercutting each other’s efforts, countries should complement each other and work for joint progress.”
Speaking at the same forum today, Christine Lagarde, managing director of the International Monetary Fund, said countries need to “reaccelerate” the process of cooperation that was evident at the beginning of the financial crisis.
“There was a very strong sense of urgency and a massive desire to cooperate,” Lagarde said. “But let’s be honest about it: That sense of urgency has clearly abated as the crisis has tempered and as recovery has been a bit more patchy.”
The spillover effects of monetary and fiscal policies “have significantly accelerated and heightened,” she said, without naming any countries. “This means that all countries and regions need to act with an even greater sense of responsibility -- responsibility not solely for the consequences of their policy for their own nation, for their own regions, but also for the rest of the world.”
Xi said he is “full of confidence in China’s future” and that the nation will maintain “robust growth momentum.” Domestic demand, particularly consumption-driven demand, will continue to grow and outbound investment will increase “substantially,” he said.
China’s economy expanded at an annual average 10.5 percent pace over the past decade and new Premier Li Keqiang said last month that the country needs to achieve growth of 7.5 percent a year to meet the country’s targets for 2020, which include doubling per capita income. Gross domestic product rose 7.8 percent last year, the least since 1999.
“The more China grows, the more development opportunities it will create for the rest of Asia and the world,” Xi said today.
Since the beginning of the century, China’s trade with its neighbors has grown from $100 billion to more than $1.3 trillion, and China has become the biggest trading partner and export market and a major source of investment for many of these nations, Xi said.
Trade within Asia has increased to $3 trillion from $800 billion in the last 10 years, and trade with other regions has grown to $4.8 trillion from $1.5 trillion, he said, according to the official Xinhua News Agency.
“This shows that cooperation in Asia is open and it goes hand in hand with Asia’s cooperation with other regions, and everyone has benefited from such cooperation,” he said.