Amid trade pressures, Chinese leaders set path for 2017

Chinese leaders have set economic goals for 2017, and they’ve taken geopolitical risks into consideration–those include trade and market access pressures from U.S. President-elect Donald Trump and European governments.

Following The Economic Work Conference, 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 conference was, which was attended by Xi and other Communist Party leaders, 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 Wednesday, 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 January 20, has vowed to press Beijing by imposing 45% 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% 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.

Staff, with files from The Associated Press

The Associated Press is an American not-for-profit news agency headquartered in New York City.