As China's economy slows, officials from the government and private sector meet this week in Beijing at the APEC Conference of Finance Ministers. The most recent economic numbers have shown China’s growth slowing, and shoring up the nation's economy is at the top of the agenda.
China’s gross domestic product increased by 7.3 percent in the third quarter.
China's Economic Growth
That is the lowest such figure since 2009, when the economy was still recovering from the global financial crisis. The growth rate also was lower than government targets.
That slowing economy is likely to be a key issue at this week’s meetings of APEC finance ministers in Beijing. Finance ministers of 21 APEC economies, leaders of international organizations and high-level representatives of the private sector are attending the talks that started Monday.
Setting goals
China’s Foreign Ministry spokesperson Hua Chunying described the goals for this week’s meeting, saying the theme of the meeting is shaping the future through partnerships in Asia. The finance ministers’ meeting will achieve three goals. Hua said the first is to achieve financial stability and contribute to the strengthening of the economy in Asia.
China also will need to demonstrate its resolve in deepening reform and creating a favorable condition for the APEC leaders meeting at the beginning of November.
Whether China can ensure financial stability for the region when its own growth appears to be falling remains an open question. Commodity and real estate prices are falling quickly. In the past decade, authorities used large state-backed infrastructure projects to keep the economy growing when global demand for exports dipped.
In the past year, officials have said they are trying to pursue larger economic reforms, though, instead of policies aimed at spurring short-term growth.
Underscoring reform
Earlier this year Prime Minister Li Keqiang said slower growth was part of the Chinese government plan to emphasize reform over rapid economic development. He and other government leaders pledged to reduce government debt and increase domestic consumption.
Wang Dong, a professor at Peking University, said, “I think China’s economy slows down because there is a need -- Chinese leaders care more about the quality of growth instead of the quantity of growth, and I think this makes sense and this is the way China should go.”
This week APEC finance ministers also will discuss China’s proposal of an Asian Infrastructure Development Bank, which could rival the World Bank in the future. The bank would fund infrastructure throughout all of Asia, and China has worked to court other nations into adding to Beijing’s pledge of $50 billion in startup capital.
Competing interests
The project has sparked criticism from the U.S. Treasury Department, however, for its potential to diminish the influence of the World Bank and Asian Development Bank. U.S. authorities also have said the bank would lack environmental standards and other safeguards that typically govern lending projects by large international institutions.
But the appetite for development across Asia remains high, and professor Dong said other countries in the region likely will not share Washington’s objections.
“I think the American opposition doesn’t make sense and it’s not constructive. I think most countries in East Asia don’t share that American view," said Dong. "I also hope the United States can take a more constructive view, have a less barrelsome mentality, and try to help and improve because this is because it is really complementary to the existing financial institutions.”
This week’s finance ministers’ meeting comes amidst China’s Fourth Plenum, a meeting of China’s powerful Central Committee. Top of the agenda for the Plenum will be two other drags on China’s national economy: corruption and lack of rule of law.