Bloomberg News

Hu Jintao Says China to Step Up Efforts to Support Growth

December 31, 2012

Hu Jintao and Xi Jinping

Hu Jintao, China's president, left, speaks with Xi Jinping, China's vice-president, after the conclusion of China's National People's Congress at the Great Hall of the People in Beijing. Photographer: Nelson Ching/Bloomberg

China will work toward bolstering global economic growth in 2013, President Hu Jintao said in a New Year’s Eve address, amid optimism that a recovery in the world’s second-biggest economy is gaining traction.

The nation will “step up efforts to promote strong, sustainable and balanced growth in the world economy,” Hu said in the speech broadcast by state radio and television. China achieved stable economic development in 2012 and will seek to do the same this year while making restructuring of its growth model a focus, he said.

Hu’s last New Year’s Eve address before he steps down as president in March signaled Chinese leaders’ confidence the economy may be rebounding after a seven-quarter slowdown. A recovery may facilitate the transfer of power to Xi Jinping, appointed head of the Communist Party in November and set to become president, as authorities seek to assuage discontent sparked by corruption and a widening income gap.

The Chinese people are now uniting around the leadership of Xi to work toward building a “well-off society,” Hu said.

China’s new Communist Party leaders have pledged to abandon extravagance, cut down on lavish receptions and live more frugally, amid a broader push to stamp out corruption and win back people’s trust.

Hu’s speech didn’t indicate how China, set to complete its once-a-decade leadership transition in March, plans to manage an economy that’s estimated to expand 8.1 percent this year.

Monetary Policy

People’s Bank of China Governor Zhou Xiaochuan, in a separate New Year’s Eve statement posted on the central bank’s website, said the nation will maintain “prudent” monetary policy and deepen financial reforms in 2013. Policy makers will seek to effectively prevent financial risks and keep prices basically stable, he said.

In another statement on the PBOC website, Zhou said the nation’s management of its foreign exchange reserves had seen stable growth in returns during the “past few years.” The global economic situation will remain “complicated” in 2013 and China’s management of its reserves will face “relatively large” challenges, he said.

China’s foreign exchange reserves increased to $3.29 trillion at the end of September from $3.18 trillion at the end of 2011, according to central bank data.

The Shanghai Composite Index (SHCOMP) has rebounded 15 percent since reaching an almost four-year low on Dec. 3 amid optimism China’s economic growth will recover. It gained 3.2 percent in 2012, its first annual advance in three years.

Manufacturing Expands

A gauge of China’s manufacturing showed a third month of expansion, adding evidence that the economic rebound will extend into the new year. The Purchasing Managers’ Index was 50.6 in December, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today in Beijing. That compares with the 51.0 median estimate in a Bloomberg News survey of 27 analysts and 50.6 in November. A reading above 50 indicates expansion.

A separate gauge yesterday showed manufacturing expanded at the fastest pace in 19 months in December, according to HSBC Holdings Plc and Markit Economics. The final reading was 51.5.

In his speech, Hu also said China sought long-term prosperity in Hong Kong and Macau and for the two so-called Special Administrative Regions to be self-governing.

China will seek the peaceful resolution of regional and international disputes, Hu said. Tensions between the nation and neighbors including Japan, Vietnam and the Philippines have flared in the past year as a result of disputes over control of islands in the East China Sea and the South China Sea.

To contact Bloomberg News staff for this story: Nicholas Wadhams in Beijing at nwadhams@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net


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