President Xi Jinping greets Bill Gates, co-chair of the Bill & Melinda Gates Foundation, at the Boao Forum for Asia Annual Conference 2013 in Boao, Hainan province, on Monday. Xi promises a fair market for businesses. Liao Pan / China News Service

President assures global investors that China will sustain its growth

President Xi Jinping assured more than 30 foreign and domestic business leaders at the Boao Forum for Asia Annual Conference 2013 on Monday that China will grow far into the future with a fair and open market.

The Chinese president looked to soothe fears over the Chinese economy's recent turbulence. He said the Chinese market has been supported by the country's modernization in agriculture and its rapid pace of industrialization and urbanization.

"China's economy will go upward instead of downward for a long time," Xi said.

In his speech, he addressed the recent speculation that China's rapid economic growth will be tough to sustain.

"China has a bright economic future and through its efforts China will maintain a relatively high speed of growth," Xi said.

China's economy has grown by double digits over the past three decades, but GDP growth cooled last year to hit a 13-year low of 7.8 percent. Xi said China needs to improve the quality and efficiency of its economy as well as focus on developing its green and low-carbon industries to achieve economic sustainability.

Chen Zhiwu, a professor of finance at Yale University, said China still has a lot of growth potential and noted that its service sector is underdeveloped.

"President Xi and his team understand it very well that much of the future growth potential is dependent on China conducting the needed institutional reforms, such as the household registration system reforms (so that people are free to move between urban and rural areas) and the land ownership reforms," Chen said. "If these fundamental reforms are done properly, China can grow for another 10 years or longer."

Economists including Justin Yifu Lin, a former chief economist and senior vice-president of the World Bank, predicted China's GDP expand from between 8 to 8.5 percent this year. The country is likely to maintain similarly rapid growth over the next 5 to 10 years, Lin said.

Victoria Lai, an analyst with the Economic Intelligence Unit in New York, also said China's GDP growth will "rebound to 8.5 percent this year, as fixed asset investment in infrastructure projects, which picked up significantly toward the end of 2012, continues into 2013".

The fact that China will not grow by double digits is a good thing, Lai said, because it encourages local governments to set lower targets and that allows room for rebalancing away from an investment-driven model.

"Demand from main export markets like the US is expected to strengthen slightly as well, which will help," she said.

PepsiCo President Zein Abdalla, one of many business leaders at the Boao Forum, said he hoped China will continue to open its market and encourage foreign companies to invest in sectors such as agriculture and its green economy. He said he hoped China continues to create a fair environment for competition.

"We fully support and share the Chinese dream and hope to be part of its realization," he said.

Olof Persson, president of AB Volvo and CEO of the Volvo Group, said his company supports China's commitment to sustainable development and hopes to contribute to China's endeavors to protect the environment.

Chen at Yale University said China's "open and fair" promise is what many foreign investors and business executives were looking for in President Xi's speech.

"There is no question that today China has almost too much domestic capital, so many officials in China have become less friendly to foreign capital, with some rules being put in place reflecting such attitudes or even biases," Chen said. "China cannot sustain its economic prosperity without offering an 'open and fair' environment for all investors and businesses, both domestic and foreign."

China's vow of an open and fair market shows its commitment to the global economy, especially as protectionism measures against China rise amid the global slowdown, said Jiang Yong, a researcher on global economics at the China Institutes of Contemporary International Relations.

"It also conveys China's confidence," he said.

According to the State Administration for Industry and Commerce, 436,800 foreign-funded enterprises were operating in China by the end of June. Their registered capital has more than doubled over the past decade to reach $1.79 trillion.

In his address at the forum, Xi said China is determined to continue its reforms.

"It is not a problem of whether to open up or not, it is a problem of how to deepen the opening-up. It is now impossible to shut the door. But we also hope that foreign countries also deepen their opening-up to China, and it should be a two-way street," he said.

Xi added that China's development is "mutually beneficial".

Many companies at the forum signaled their willingness to help China's social development.

Andrew Forrest, chairman of Australian mining company Fortescue Metals Group, said his company grew after selling iron ore to China. His company, he said, will increase its investments in China and be more involved in China's social development.

The Japanese business community called for the development of a strategic and mutually beneficial relationship with China to promote trade and economic cooperation, said Koji Miyahara, chairman of Japanese shipping giant Nippon Yusen Kaisha.

For Asia to lead global growth, Miyahara said, "it requires building mutual trust and cooperation to realize common development".