China Planning 'Major' Reforms Ahead of Key Political Meeting

Chinese President Xi Jinping arrives for a ceremony in Beijing marking the 70th anniversary of the Five Principles of Peaceful Coexistence /AFP
Chinese President Xi Jinping arrives for a ceremony in Beijing marking the 70th anniversary of the Five Principles of Peaceful Coexistence /AFP
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China Planning 'Major' Reforms Ahead of Key Political Meeting

Chinese President Xi Jinping arrives for a ceremony in Beijing marking the 70th anniversary of the Five Principles of Peaceful Coexistence /AFP
Chinese President Xi Jinping arrives for a ceremony in Beijing marking the 70th anniversary of the Five Principles of Peaceful Coexistence /AFP

Chinese President Xi Jinping said Friday the ruling Communist Party was planning and implementing "major" reforms, ahead of a closely watched political conclave that is expected to put economic recovery high on the agenda.

Chinese policymakers have struggled to reignite growth since the end of strict Covid-19 pandemic health curbs in late 2022.

The world's second-largest economy is beset by a debt crisis in the property sector, persistently low consumption and high youth unemployment, according to Reuters.

Xi said in a speech on Friday policymakers "are planning and implementing major measures to further deepen reform in a comprehensive manner".

"We will... form a more market-oriented, legal and international business environment," he said.

"China's door will only open wider and wider, and will never be closed."

Xi has touted the promise of significant reform several times this year and the government has already enacted measures in key sectors such as real estate to try to address critical issues.

It was announced on Thursday that the delayed Third Plenum -- a meeting historically watched for signals on economic policy direction -- will take place in Beijing in mid-July.

The key meeting of top officials, originally expected last autumn, is highly anticipated in the hopes it might resolve the uncertainty that has weighed on China's economy.

The People's Bank of China (PBOC), the country's central bank, pledged later on Friday to "promote the implementation of the financial policies and measures already issued, and push for the stable and healthy development of the real estate market".

"(We will)... promote the accelerated construction of a new model for real estate development," the PBOC said in a statement.

Xi's address at Beijing's opulent Great Hall of the People, delivered in front of a high-profile international audience, marked the 70th anniversary of some of China's foundational diplomatic tenets.

The Five Principles of Peaceful Coexistence include mutual respect for territorial integrity, mutual non-aggression, mutual non-interference in internal affairs, equality and cooperation for mutual benefit, and peaceful coexistence.

Xi hailed China as a force for global peace, saying in his speech Beijing would continue to play "constructive roles" in international conflicts such as Gaza and Ukraine.

China has been criticized by Ukraine's allies for failing to condemn Russia's 2022 invasion and accused of favouring Moscow. Beijing insists it is a neutral party.

In the Middle East, China has advocated for decades for a two-state solution to the Israel-Palestinian conflict.

Xi called for greater cooperation between China and developing countries in his speech.

"Engaging in small yard, high-wall decoupling practices is to move against the tide of history," Xi said.

"It will only harm the common interests of the international community."



Federal Reserve Cuts Key Interest Rate by a Quarter-point

US Federal Reserve Chair Jerome Powell attends a press conference following a two-day meeting of the Federal Open Market Committee on interest rate policy in Washington, US, November 7, 2024. REUTERS/Annabelle Gordon
US Federal Reserve Chair Jerome Powell attends a press conference following a two-day meeting of the Federal Open Market Committee on interest rate policy in Washington, US, November 7, 2024. REUTERS/Annabelle Gordon
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Federal Reserve Cuts Key Interest Rate by a Quarter-point

US Federal Reserve Chair Jerome Powell attends a press conference following a two-day meeting of the Federal Open Market Committee on interest rate policy in Washington, US, November 7, 2024. REUTERS/Annabelle Gordon
US Federal Reserve Chair Jerome Powell attends a press conference following a two-day meeting of the Federal Open Market Committee on interest rate policy in Washington, US, November 7, 2024. REUTERS/Annabelle Gordon

The Federal Reserve cut its key interest rate Thursday by a quarter-point in response to the steady decline in the once-high inflation that had angered Americans and helped drive Donald Trump’s presidential election victory this week.
The rate cut follows a larger half-point reduction in September, and it reflects the Fed’s renewed focus on supporting the job market as well as fighting inflation, which now barely exceeds the central bank’s 2% target, The Associated Press reported.
Asked at a news conference how Trump's election might affect the Fed's policymaking, Chair Jerome Powell said that "in the near term, the election will have no effects on our (interest rate) decisions.”
But Trump’s election, beyond its economic consequences, has raised the specter of meddling by the White House in the Fed’s policy decisions. Trump has argued that as president, he should have a voice in the central bank’s interest rate decisions. The Fed has long guarded its role as an independent agency able to make difficult decisions about borrowing rates, free from political interference. Yet in his previous term in the White House, Trump publicly attacked Powell after the Fed raised rates to fight inflation, and he may do so again.
Asked whether he would resign if Trump asked him to, Powell, who will have a year left in his second four-year term as Fed chair when Trump takes office, replied simply, “No.”
And Powell said that in his view, Trump could not fire or demote him: It would “not be permitted under the law,” he said.
Thursday’s Fed rate cut reduced its benchmark rate to about 4.6%, down from a four-decade high of 5.3%. The Fed had kept its rate that high for more than a year to fight the worst inflation streak in four decades. Annual inflation has since fallen from a 9.1% peak in mid-2022 to a 3 1/2-year low of 2.4% in September.
When its latest policy meeting ended Thursday, the Fed issued a statement noting that the "unemployment rate has moved up but remains low,” and while inflation has fallen closer to the 2% target level, it “remains somewhat elevated.”
After their rate cut in September — their first such move in more than four years — the policymakers had projected that they would make further quarter-point cuts in November and December and four more next year. But with the economy now mostly solid and Wall Street anticipating faster growth, larger budget deficits and higher inflation under a Trump presidency, further rate cuts may have become less likely. Rate cuts by the Fed typically lead over time to lower borrowing costs for consumers and businesses.
Powell declined to be pinned down Thursday on whether the Fed would proceed with an additional quarter-point rate cut in December or the four rate cuts its policymakers penciled in for 2025.