China's Hu Jintao vows reforms, higher incomes

Hu Jintao

China will reform to make its currency and interest rates more market-based, boost overseas investments and plough more state funds into industry as part of plans to keep GDP on track to double in size by 2020, President Hu Jintao said on Thursday.

Hu also restated a commitment to targets that would double household incomes nationwide in a decade, in a speech prepared for delivery at the opening of China's Communist Party Congress. Hu is due to step down as party chief during the congress.

We should firmly maintain the strategic focus of boosting domestic demand, speed up the establishment of a long-term mechanism for increasing consumer demand, unleash the potential of individual consumption, increase investment at a proper pace, and expand the domestic market, Hu's speech said.

We should develop a multi-level capital market, take steady steps to make interest rates and the renminbi exchange rate more market-based and promote the renminbi's convertibility under the capital account in due course, it added.

Hu's restatement of existing pledges gave no specific timeline for their delivery, nor any fresh indications of size of the spending plans or the source of funding for them.

While there was little fresh in the speech, economists said the reiterations were important given an economic downdraft that has seen growth slow for seven successive quarters and left 2012 on course for the lowest full year of growth since 1999 - albeit at a 7.7 percent clip that is the envy of developed economies.

Because there's been so much talk about growth slowing in China, reiterating the target in this speech was important. But the numbers are not new news, Tim Condon, head of Asian economic research at ING in Singapore, told Reuters.

China's leaders have, since the days of Deng Xiaoping's landmark reform programme in the late 1970s, pledged to double the size of the economy every 10 years.

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