Hu Jintao sticks to socialist economy in speech at once-in-decade leadership change ceremony

Last Updated: Fri, Nov 09, 2012 10:48 hrs

Beijing: China's Communist Party is to stick 'unswervingly' to state control over Asia's largest economy, dashing hopes for deep free-market reform over the next decade.

President Hu Jintao opened the 10-year power handover with a clear warning to modernizers that Beijing will not give up control over the commanding heights of industry and commerce.

During the address after a decade in power, he insisted that 'public ownership is the mainstay of the economic system' and warned that the party must 'resolutely not follow Western political systems'.

The language was peppered with anti-reform code words and pointed references to 'Mao Zedong Thought', as well as a warning not to fall into 'wicked ways', the Telegraph reports.

While Jintao called for a 'level-playing field' for private firms competing with huge state enterprises, he said the party should 'steadily enhance the vitality of the state-owned sector and its capacity to leverage and influence the economy', the report said.

The underlying message is that there will be no root-and-branch reform of the great behemoths that still dominate the Chinese system and are widely blamed for graft and wasteful over-production, it added.

According to the report, Jintao said China would stick to its strategic drive to 'boost domestic demand, and unleash the potential of individual consumption', accompanied by a slow shift away from currency controls.

"We should develop a multi-level capital market, take steady steps to make interest rates and the renminbi exchange rate more market-based and promote convertibility in due course," he said.

While Jintao acknowledged that China cannot cling to an obsolete catch-up model, his speech makes its clear that the country will not follow the free-market path of Taiwan, Korea, and Singapore, the report added.

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