Chinese President Tell Country to Get Used to Slow Growth

China’s president has told the country to get used to slower growth, damping expectations of a new stimulus.

President Xi Jinping’s weekend comments come amid weakening trade and manufacturing. Economic growth slowed in the latest quarter to 7.4 percent after last year’s full-year expansion of 7.7 percent tied 2012 for the weakest performance since 1999.

“We must boost our confidence, adapt to the new normal condition based on the characteristics of China’s economic growth in the current phase and stay cool-minded,” Xi said, according to the official Xinhua News Agency.

The ruling Communist Party is trying to steer the economy to self-sustaining growth based on domestic consumption instead of trade and investment.

Other leaders have ruled out more stimulus, but unexpectedly weak demand for Chinese exports has forced Beijing to backtrack and launch mini-stimulus efforts last year and in March. Official plans call for annual trade growth of 7.5 percent but so far this year total imports and exports are down by 0.5 percent.

Analysts say the ruling party appears willing to accept economic growth below its 7.5 percent target this year so long as the rate of creation of new jobs stays high enough to avoid political tensions.

via Mainichi

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza