Canadian Manufacturing

China vows to be more competitive and productive at economic policy conference

The government has promised to allow market forces to play a bigger role, but reform advocates complain Beijing is failing to reduce the dominance of state-run companies


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BEIJING—Chinese leaders have met to set economic goals for 2017 amid pressure from U.S. President-elect Donald Trump and European governments over trade and market access.

The government of President Xi Jinping has promised to make the world’s second-largest economy more competitive and productive by giving market forces a bigger role, but reform advocates complain Beijing is failing to reduce the dominance of state companies. Foreign companies say regulators are trying to squeeze them out of technology and other promising fields.

The Economic Work Conference, attended by Xi and other Communist Party leaders, is a throwback to China’s era of central planning but still plays a key role in directing economic development.

This year’s gathering, which began Dec. 14, comes as Beijing faces complaints it is hampering access to its markets and subsidizing exports in violation of its free-trade commitments.

Trump, who takes office Jan. 20, has vowed to press Beijing by imposing 45 per cent tariffs on Chinese goods. Few economists expect Trump to go that far but any sanctions could hurt Chinese export industries that support millions of jobs.

For their part, European governments face complaints by steelworkers and others that a flood of low-cost Chinese exports is threatening their jobs.

European business leaders express frustration that Beijing blocks foreign purchases of most Chinese assets while its own companies are on a global buying spree to acquire technology and brands.

China’s ruling party has emphasized its intention to tighten political control over major companies, which its trading partners say runs counter to pledges to promote competition. Official development plans call for Chinese companies to dominate fields including information technology, electric cars and other emerging industries.

“The world will listen whether the conference will send credible signals of further opening and reform,” said Germany’s ambassador to Beijing, Michael Clauss, in a statement on his embassy’s website.

“The signals so far are mixed at best,” said Clauss. “The keywords seem to be stability, security and unified thinking, not bold reform, equal competition and liberated thinking.”

Chinese economic growth held steady at 6.7 per cent over a year earlier in the quarter ending in September, shored up by twin booms in credit and real estate sales. Forecasters expect growth to weaken as regulators tighten lending controls and try to cool housing costs.

Communist leaders insist they are comfortable with slower growth after the last decade’s explosive double-digit expansion but face pressure to avoid a spike in job losses.


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