China president seeks to reassure on reform, heads to U.S.

Tue Sep 22, 2015 6:35am EDT
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By Pete Sweeney and Kevin Yao

SHANGHAI/BEIJING (Reuters) - Chinese President Xi Jinping added his voice on Tuesday to officials trying to reassure the world that the government was still firmly committed to financial reform following criticism of its intervention to steady rocky markets and boost growth.

The comments came as the country's stock market showed further signs of stabilizing after a raft of government measures aimed at shaking out speculators and preventing a 40 percent slide since June turning into a full-scale market crash.

Steady financial markets will be critical for the president this week when he visits the United States, where he is likely to be grilled on China's actions to arrest the market slide.

The wild fluctuations have unnerved policymakers globally and even fed into the U.S. Federal Reserve's decision last week to hold back from raising interest rates from a record low.

Officials in Washington have pressed China to reaffirm its commitment to a market-orientated, consumer-driven economy and policy transparency, especially in the wake of its surprise devaluation of the yuan, also known as the renminbi, in August.

"Reform of the renminbi exchange rate formation regime will continue in the direction of market operation," Xi said in an interview with the Wall Street Journal. He said the government's market intervention, which some critics said was heavy handed, had been necessary to "defuse systemic risks".

Indeed, British Finance Minister George Osborne said during a visit to China that authorities should be supported as they remain committed to market liberalization following the bout of volatility this summer.

Speaking at the Shanghai Stock Exchange, Osborne said he was keen to see a formal stock market trading link between China and London, part of his goal to make Britain China's "best partner in the West".   Continued...

Chinese President Xi Jinping is seen during a meeting with U.S. National Security Advisor Susan Rice (not pictured) during their meeting at the Great Hall of the People in Beijing, China, August 28, 2015. REUTERS/Jason lee