How confident Xi reassures the world on China’s future

As the International Monetary Fund has called for forceful action to get out of the low-growth trap, Xi told leaders China had the confidence and ability to maintain medium-high rate growth and deliver more development opportunities while ensuring its own development.

Although China’s growth has eased to the lowest rate since the financial crisis, it remains the single largest contributor to world growth.

Sustainable, healthy growth matters more than speed.

The malaise of the global economy has not been cured, partly due to the half-baked and half-hearted structural reforms undertaken.

On that front, China offers inspiration. As Xi said, China’s reform goal has been set and will not be deviated from. The country will advance reform and will not slow the pace.

Structural reform is painful and takes time to show its effect. With structural problems plaguing the Chinese economy for so long, the later it reforms, the higher the price the economy must bear.

Instead of relentless monetary easing, China looks to supply structural reform by reducing overcapacity and bureaucracy and supporting efficiency and innovation.

As major advanced economies erect walls of protectionism to shore up growth, the Chinese president said the beggar-thy-neighbour approach would not help any country out of crisis and only narrowed the space for common development, leading to a lose-lose scenario.

Ideas have been translated into action.

The number of free trade zones has expanded at a remarkable pace. Foreign companies are reaping handsome benefits in China, and the country is considering allowing them easier access to a bigger market.

It’s not crisis time yet, but the alarm bell is ringing. IMF managing director Christine Lagarde observed that not since the early 1990s had the world economy been so weak for so long.

The global community had never been as unanimous as it is today in recognising the urgency of structural reform.

With countries facing various structural challenges, they need to work together to ensure their policies do not counteract each other.

The world economy needs more than a shot of adrenalin; it needs a cure for its chronic ills.

Xi’s reassurance on China’s future offers one more thing the world economy urgently needs: confidence.