Chinese leader wants to guarantee domestic demand and produce more – 06/03/2023 – Market

Chinese President Xi Jinping has pledged to boost the country’s manufacturing capacity so as not to depend on foreign markets, state media reported on Monday.

In his annual address to parliament in Beijing on Sunday, Xi said China must be able to stand on its own two feet.

“I have always said that there are two critical areas for China: one is protecting our rice bowl and the other is building a strong manufacturing sector,” Xi told the state-run People’s Daily.

“As a great nation of 1.4 billion people, we must rely on ourselves,” he added. “We cannot depend on international markets to save us.”

Xi made the remarks during a meeting with delegates from China’s Jiangsu province.

Beijing insists on the need to build a self-sufficient industry and abandon imports in sectors considered vital to national security, such as semiconductors and artificial intelligence.

In recent months, the US government has tightened sanctions against Chinese chip makers, citing national security concerns and the possibility that the technology could be used by the Chinese military.

Order for companies to be ‘rich and loving’

Xi Jinping also said on Monday that private companies should be “rich and loving” in taking responsibility along with state-owned companies to achieve prosperity for all.

Chinese and foreign private companies are waiting for Beijing to provide details on how it intends to pursue “common prosperity”, Xi’s initiative to narrow China’s wealth gap, and how it expects private companies to contribute.

Meeting behind closed doors with government advisers representing the business sector, Xi called on private companies and entrepreneurs to be “patriotic” and actively participate in charitable endeavors, state radio reported on Monday.

Xi also said private companies should share the fruits of their growth with employees more equitably, in what he called a “community of shared interests”.

“Be rich and responsible, be rich and benefit others, be rich and loving,” Xi was quoted as saying by state radio.

Some analysts say private companies are concerned that Xi’s call for “common prosperity” could translate into a de facto tax as debt-ridden local governments struggle to raise tax revenue.

“The problem with ‘common prosperity’ is that it can lead to a very uncertain tax burden, unlike the official corporate tax rate set by law,” Alfred Wu, an associate professor at the Lee Kwan Yew School of Public Policy, told Reuters. from the National University of Singapore.

He said it was unfair to expect private companies to share the social responsibility for “common prosperity” with state-owned companies, which enjoy privileged access to markets and preferential loans not always available to private companies.

Xi said on Monday that China will always treat companies and private entrepreneurs as “family” and vowed to remove institutional obstacles that prevent private companies from competing fairly, according to state radio.

Beijing has pledged to support a private sector reeling from a regulatory crackdown on property, technology and private education and state-imposed Covid-19 restrictions that were lifted in December.

Xi blamed the West for the difficulties facing the Chinese economy. “Led by the United States, the West has implemented all-out restraint to crack down on China, bringing unprecedented challenges to China’s development,” Xi was quoted as saying by state radio.