Chinese leaders promise more imports, less financial risk

By JOE McDONALDMarketsAssociated Press

Chinese leaders promised Wednesday to increase imports and reduce risks in their financial system amid slowing economic growth and pressure from Washington and Europe to open their markets wider.

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A statement issued after a three-day planning meeting contained no new initiatives and was in line with the ruling Communist Party's plans to make the economy more efficient while also building up state industries.

The Central Economic Work Conference, led by President Xi Jinping, is a throwback to China's era of central planning and plays an important role in setting development goals for the state-dominated economy.

The statement promised to increase imports amid efforts to spur economic growth driven by domestic consumer spending and reduce reliance on trade and investment. It gave no indication Beijing planned changes in response to complaints that U.S., European and other foreign companies are shut out of a wide range of industries.

"China vows to increase imports and cut import tariffs for some products to promote balanced trade," the official Xinhua News Agency said.

The government announced tariff cuts in November on consumer goods including avocados, mineral water and baby carriages in what it said was an effort to "enrich domestic consumption choices."

Wednesday's statement promised further steps to trim surplus industrial production that is straining trade ties with the United States and Europe, which complain China is flooding global markets with low-cost steel and aluminum, driving down prices and threatening jobs. Washington has responded by hiking import duties on some products.

The Communist Party is in the midst of a multiyear effort to reduce the size of Chinese steel and coal industries. The statement gave no indication of which industries might be targeted next.

It also reflected the party's sometimes conflicting goals of creating an efficient, market-oriented economy but promoting state-owned companies that dominate industries from banking and telecoms to energy and steel.

The leaders repeated their earlier pledge to give market forces the "decisive role" in allocating resources and promised to support development of private companies that generate most of China's new jobs and wealth. They said China will "expand opening up to the outside world, substantially relax market access and speed up the formation of a new pattern of full opening up."

At the same time, the statement also vowed to "strengthen, increase, upgrade and improve state-owned assets" in fields including oil, gas, power and railways.

The leadership also said it will "quicken the pace of the upgrading of the manufactural industry," a reference to controversial efforts to develop Chinese strengths in electric cars, renewable power and other fields.

Beijing's ambitions to create Chinese high-tech competitors have prompted complaints by business groups that it is blocking foreign competitors from promising industries in violation of its market-opening commitments.

The statement also pledged to "crack down on illegal activities in the financial industry to forestall risks."

Regulators have tightened control over China's financial industries following scandals in insurance and banking and the collapse of a multibillion-dollar online lender that authorities said was a pyramid scheme.

Beijing announced in November it would allow full foreign ownership of Chinese banks as part of efforts to improve the industry. The United States and Europe have lobbied for such a change for years but business groups said it may be too late for foreign institutions to get a foothold in a market controlled by state-owned lenders.

Beijing also is trying to rein in growth of debt that stands at the equivalent of 270 percent of annual economic output.

"The floodgates of monetary supply should be controlled, and credit and social financing should see reasonable growth," the statement said.