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China to maintain economic course to ensure stability, Communist Party says

The Communist Party’s Politburo vowed on Friday to keep existing economic policies in place to ensure stable economic growth for the rest of the year.

The meeting, which came after the close of the Central Committee’s sixth plenum, called for “reasonable” fiscal expenditure as part of the proactive fiscal policy and sufficient liquidity in a prudential monetary policy.

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But it underscored the need to “curb asset bubbles and safeguard against economic and financial risk”, according to a statement released after the ­meeting.

Growth was 6.7 per cent in the third quarter amid initial signs of improvement in the overall economy.

But that growth was largely contributed by an already overheated property market, while the private sector, which accounts for at least half the nation’s employment, lacks incentives to expand or invest in production.

Meanwhile the yuan is facing a new round of depreciation pressure against the US dollar, both onshore and offshore, and publicly available data showed the outflow of capital accelerated last month.

All these point to fragile growth and cloud the prospects for a more solid recovery.

“The growth divergence in regions, sectors and enterprises remains big. There are still many conflicts and problems in economic performance,” the Politburo said.

It also required local governments to consolidate investment, boost foreign trade and put reforms in place.

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The meeting, which was presided over by President Xi Jinping, said the “new momentum” for economic growth was growing and local governments had increased their incentives to promote reform.

The country must implement supply-side reform, appropriately expand demand and refine policies to ensure this year’s economic targets were met, CCTV quoted Xi as saying.

Xi said the economy was showing diverging trends, including in regional growth, while there remained a large number of problems.

The Politburo said urban job creation in the first three quarters was better than expected and the financial market remained stable.

But there has been wide criticism that key reforms such as in state-owned enterprises have been disappointing and that the overhaul of the financial regulatory regime had been delayed.

Any bold reform moves were not expected until a top power reshuffle next year was complete, observers said.