China to Adopt New Vision of Economic Development, Xi Says

--Gov't to Further Deepen Institutional Reform

--Supply-Side Structural Reform to Serve as 'Main Guideline'

     BEIJING (MNI) - China will pursue a "quality-first" economy under a new

vision of development led by the ruling Communist Party, President Xi Jinping,

who is also the party's chairman, said at the 19th CPC National Congress, which

opened on Wednesday in Beijing.

     "We should endeavor to develop an economy with more effective market

mechanisms," make smaller businesses more dynamic, and keep sound

macro-management, Xi said in a speech that lasted more than three hours. "We

will move Chinese industries to the medium-high end of the global value chain,

and foster a number of world-class advanced manufacturing clusters," he said.

     China will further deepen institutional reform in the financial system to

serve the economy and forestall systemic financial risks, Xi said. The

government will also improve the framework of regulation backed by monetary and

macro-prudential policies, and push interest rates and exchange rates to be more

market-based, he said.

     Stressing the need to further supply-side reform, a pet project that Xi

championed in his first term, Xi said China must continue to focus on the real

economy, reduce overcapacity and debt. "We should pursue supply-side structural

reform as our main guideline" to optimize the economic structure and foster new

growth drivers, Xi said.

     State-owned companies (SOEs) must be "stronger, better and bigger," Xi

said. The government will deepen the reform of this sector, promote

mixed-ownership economy and nurture world-class businesses, he said.

     China will also enhance the system that boosts consumption to strengthen

the fundamental role that spending plays in the economy, Xi said.

     During the week-long convention, Xi is expected to display that he has

consolidated his grip over the party and China, paving the way for his second

term as the president of the world's second-largest economy.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

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