REPEAT: China to Achieve 'Socialist Modernization' by 2035: Xi

Repeats Story Initially Transmitted at 12:13 GMT Oct 18/08:13 EST Oct 18

--China to Adopt New Vision of Quality-First Development

--Gov't to Further Deepen Institutional Reform

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

     BEIJING (MNI) - China will leap to become a "new innovation" world leader

in just under two decades by boosting its economic and technological

capabilities, President Xi Jinping said on Wednesday.

     The world's second-biggest economy will pursue a "quality-first"

development vision led by the ruling Communist Party of China, Xi, who is also

the party's chairman, said in Beijing at the opening of the 19th CPC National

Congress.

     Speaking non-stop for more than three hours, Xi touched on everything from

stamping out corruption to extolling healthier living to the virtue of a "grand

revival" of Chinese culture, urging the 80-million-plus members of the communist

elite to "strive for 30 years" and build a rich, strong and democratic nation

with modern management and governance. 

     Xi's two-phase vision for the nation's further development -- basically

realizing "socialist modernization" by 2035 and then becoming a "great socialist

country" by 2050 -- is marked by the centennials of the Communist Party,

established in 1921, and the People's Republic, founded in 1949. 

     China is still likely to target a moderately high GDP growth number at the

National People's Congress next March, ANZ Research said in a report following

Xi's speech. To be an "innovative economy" like South Korea by 2035, China's

gross domestic income per capita needs to rise by an average of 6.6% in real

U.S. dollar terms or 4.5% in purchasing power parity terms, starting 2017,

according to ANZ.

     To be a modernized economy by 2050 -- or a high-income country by the World

Bank's standard -- the required average growth rates should be 4.9% in U.S.

dollar terms and 3.3% per year in PPP terms over the next 35 years, ANZ said.

     Xi said in his opening speech that China "should endeavor to develop an

economy with more effective market mechanisms," make smaller businesses more

dynamic, and uphold sound macro-management principles.

     "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," Xi

said.

     Xi stressed that China must now pursue more balanced growth after securing

its bread-and-butter needs. Society's major challenge has shifted to "people's

needs for better lives versus unbalanced, inadequate development," 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 repeated that China must continue to focus on

the real economy, and 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 a

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.

     On foreign relations, Xi reiterated China will promote its "One Belt, One

Road" initiative and support multilateral trade systems, while actively

participating in global governance. 

     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

five-year-term as the leader of almost 1.4 billion people.

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

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

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