BEIJING - China has made progress in reducing debt and this has not dampened the economy significantly, a Chinese Communist Party (CCP) official said, in the face of international concern over the economic powerhouse’s debt overhang.
China’s efforts to reduce debt should not conflict with stable economic growth, CCP spokesman Tuo Zhen said at a press conference on Tuesday (Oct 17), the eve of the opening of the 19th national party congress.
“In the long term, proactive deleveraging helps to eliminate risks that could impact steady and healthy economic development,” Mr Tuo added.
His remarks came as the International Monetary Fund (IMF) on Oct 10 raised its forecast of China’s growth from 6.7 per cent to 6.8 per cent but warned against a build-up of debt.
In its latest World Economic Outlook report, the IMF said China’s slower transition from an investment-based economy to a consumption-based one “comes at the cost of further large increases in debt”.
Last month, rating agency Standard and Poor’s cut China’s sovereign rating, giving as reason increased economic and financial risks as a result of its “prolonged period of strong credit growth”. This followed a similar move earlier this year by Moody’s.
On Tuesday (Oct 17), Mr Tuo indicated Chinese President Xi Jinping’s political thoughts would be written into the CCP’s constitution at the party congress, held five-yearly. He said the amended charter would “signify the new vision, thinking and strategies for the governance of China” that the Central Committee with Mr Xi at its core had developed since the 18th congress five years ago.
It has been expected that Mr Xi’s political thought would be written into the party charter at this congress, which would elevate his status and strengthen his grip on power.
Asked about political reform, Mr Tuo noted that China’s achievements in the decades since reform and opening up would not have been possible without political structural reform. He said, however, that China “will not blindly replicate models of other countries” in its political reform.
Tuesday's (Oct 17) press briefing came after a preparatory meeting adopted a working agenda for the congress which, apart from adopting amendments to the party charter, will also elect a new Central Committee and new Central Commission for Discipline Inspection, the party’s anti-graft watchdog.
The congress ends next Tuesday (Oct 24) after which the new Central Committee will meet the following day to elect a new Politburo and Politburo Standing Committee (PSC), the top-decision making body of the party.
Mr Xi is expected to stack both the Politburo and PSC with his allies, thus strengthening his power further.
Both bodies will see a large turnover of members as many of the current members are at or over the unwritten retirement age of 68.
New PSC members will meet the media after their election, likely on Oct 25, a much-anticipated event as who makes it to the body would affect China’s direction in the next five years.