China's economic growth will accelerate because the country will finally get leaders who aren't scared, a former advisor to China's central bank said Wednesday.
"The most important reason is that there is a new group of officials being appointed ... (who will emerge) around the 19th Party Congress which will be in mid to late October," said Li Daokui, who is now Dean of the Schwarzman College at Tsinghua University in Beijing.
During the World Economic Forum's annual June meeting in Dalian, Li said the Chinese economy will grow 6.9 to 7 percent by 2018 from 6.7 percent in 2017. China posted 6.7 percent GDP growth in 2016, the slowest in 26 years.
The major political event will also usher in a new era of leaders who are likely to spearhead bold reforms of state-owned enterprises, in contrast to incumbents who are "very, very tentative" and "scared" as they do not know if their past dealings are now acceptable.
Since assuming power in 2012, President Xi Jinping has embarked upon a sweeping campaign against corruption, taking down the once-untouchable party, military and business leaders and their networks.
Last week, the market was rocked by news of an ongoing probe into several of China's largest overseas asset buyers, including high-profile Chinese companies such as billionaire Wang Jianlin's Wanda Group, Anbang Insurance and Fosun.
Li said the outcome of the investigation is likely to reveal few cases of misconduct as the huge investments under scrutiny were carried out in a "highly, highly intense political environment".
The news followed an earlier announcement in June from Anbang Insurance that its chairman, Wu Xiaohu, was no longer able to fulfill his duties. The brief statement cited unspecified personal reasons for the move, and it came after the China Insurance Regulatory Commission said in April that its head, Xiang Junbo, was being investigated for suspected disciplinary violations.
In May, Anbang was suspended from issuing new products for three months over concerns about the design of one of its product offerings.
Tsinghua's Li said a new "super agency" is likely to be set up after the party congress as the Chinese financial system is now too complicated and intertwined.
"It doesn't make sense to have segmented regulations. They should have a single agency overseeing everybody," he said.
Source: Bloomberg Pro Terminal
Trader - S. Fuchedzhiev
Read more:
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.