Cracks are opening in China's mighty economy: investors are backing away from deals, factories are moving abroad and companies are shedding jobs.

The world's second-largest economy is losing steam, hitting its slowest growth in almost three decades last year, and flagging further in recent months.

While gross domestic product grew at 6.6 per cent in 2018 -- a rate that would be the envy of most nations -- China's efforts to cut its debt mountain have weighed on the economy.

Private businesses in particular face new hurdles as costs rise and financing becomes harder to come by, while the trade war with the United States has not helped.

Here is a look at some of the struggles faced by Chinese companies and people:

Game over for gamers

Feeding China's addiction to video games seemed an easy bet for Beijing Yixin Technology, a tech startup behind the mobile game Farm Take Home.

The game allows players to harvest wheat, raise chickens and plant apple trees -- a bucolic refuge from the pressures of urban China.&nbsp;

But in real life, the tech firm has struggled to find investors.

"In December our company's funding ran out, we had an investment lined up, but the money never came through," said chairman Cui Yi.

"This month I arranged another investor, then he backed out too. I think we can't hold out."&nbsp;

His company is not alone.&nbsp;

Venture capital funding dried up at the end of last year. Total investment in the fourth quarter fell 13 per cent from a year earlier, according to data from Preqin market research.&nbsp;

Policymakers are partly to blame, pushing a war on debt and financial risk that has cut the funding flowing into investment firms, industry insiders say.

Another government diktat halted new video game approvals for months -- officially due to youth gaming addiction concerns -- sending firms like Beijing Yixin into a deep freeze.

Trade war

Other companies are facing the fallout from the trade war with the United States.

More than a handful of exporters have sought to get around US tariffs by building factories outside China, according to a review of public stock filings.&nbsp;

Others are sending workers home early for Chinese New Year or cutting overtime.

Last month China's exports fell.&nbsp;

"It has hit our profits," Harry Shih, manager of Runfine Bearings in eastern Zhejiang province, said of the trade war.

Washington slapped 25 per cent taxes on many types of ball bearings in July. Shih said he had shared the cost increase with his customers, roughly half of whom are from the US.

"Business is going down for most companies including factories. Like me they have the same problems, profits are going down" as costs rise, said Shih.

Dearth for a salesman

Slowing disposable income growth and tighter credit have hit consumer spending, with car sales falling last year for the first time in more than 20 years.

"Volumes have fallen by half," said Wang Jingjing, a fast-talking 23-year-old salesman at a Ford dealership in Beijing, noting about one-third of the salespeople had been fired or left.

Wang's own salary has roughly halved, he said, from around 10,000 yuan ($1,474) a month in 2017 down to less than 5,000 yuan ($737).

"I've definitely controlled my own spending, going out to eat less, buying less, cutting down on these things," he said, adding he believes things will turn around this year with new car models coming out.

Job crunch

Official data shows unemployment at a stable rate, rising slightly to 4.9 per cent last month.

But independent data paints a different picture.&nbsp;

In October-December advertised tech positions fell by 20 per cent from a year earlier, after declining 51 per cent in the third quarter, according to data from Zhaopin, China's largest recruitment website and Renmin University.

China's economy "faces downward pressure, and to some extent, this pressure will be transmitted to the job market," said Meng Wei, a spokeswoman for the National Development and Reform Commission, China's state planner.&nbsp;

A lawyer who consults on labour disputes, Guo Xuehai of Beijing Zhonghai Law Firm, said, "there are definitely more employees coming for help than before," but added this was usually the case at this time of the year.

At Beijing Yixin, Cui said he could only afford to pay his 30-odd employees 70 per cent of their salaries as money ran out in November. By December he paid them nothing and this month he cut their insurance and benefit plan, unofficially firing them.

"We worked 9 am to 9 pm plus Saturdays with no overtime pay and now no pay at all," said a 3D designer surnamed Li, who helped build Farm Take Home.

Employees looking for new jobs have found that companies are not hiring at the moment.&nbsp;

"Hopefully it will be better after Chinese New Year," Li said.

Cracks are opening in China's mighty economy: investors are backing away from deals, factories are moving abroad and companies are shedding jobs. The world's second-largest economy is losing steam, hitting its slowest growth in almost three decades last year, and flagging further in recent months.

Cracks are opening in China's mighty economy: investors are backing away from deals, factories are moving abroad and companies are shedding jobs. The world's second-largest economy is losing steam, hitting its slowest growth in almost three decades last year, and flagging further in recent months. While gross domestic product grew at 6.6 per cent in 2018 -- a rate that would be the envy of most nations -- China's efforts to cut its debt mountain have weighed on the economy. Private businesses in particular face new hurdles as costs rise and financing becomes harder to come by, while the trade war with the United States has not helped. Here is a look at some of the struggles faced by Chinese companies and people: Game over for gamers Feeding China's addiction to video games seemed an easy bet for Beijing Yixin Technology, a tech startup behind the mobile game Farm Take Home. The game allows players to harvest wheat, raise chickens and plant apple trees -- a bucolic refuge from the pressures of urban China. But in real life, the tech firm has struggled to find investors. "In December our company's funding ran out, we had an investment lined up, but the money never came through," said chairman Cui Yi. "This month I arranged another investor, then he backed out too. I think we can't hold out." His company is not alone. Venture capital funding dried up at the end of last year. Total investment in the fourth quarter fell 13 per cent from a year earlier, according to data from Preqin market research. Policymakers are partly to blame, pushing a war on debt and financial risk that has cut the funding flowing into investment firms, industry insiders say. Another government diktat halted new video game approvals for months -- officially due to youth gaming addiction concerns -- sending firms like Beijing Yixin into a deep freeze. Trade war Other companies are facing the fallout from the trade war with the United States. More than a handful of exporters have sought to get around US tariffs by building factories outside China, according to a review of public stock filings. Others are sending workers home early for Chinese New Year or cutting overtime. Last month China's exports fell. "It has hit our profits," Harry Shih, manager of Runfine Bearings in eastern Zhejiang province, said of the trade war. Washington slapped 25 per cent taxes on many types of ball bearings in July. Shih said he had shared the cost increase with his customers, roughly half of whom are from the US. "Business is going down for most companies including factories. Like me they have the same problems, profits are going down" as costs rise, said Shih. Dearth for a salesman Slowing disposable income growth and tighter credit have hit consumer spending, with car sales falling last year for the first time in more than 20 years. "Volumes have fallen by half," said Wang Jingjing, a fast-talking 23-year-old salesman at a Ford dealership in Beijing, noting about one-third of the salespeople had been fired or left. Wang's own salary has roughly halved, he said, from around 10,000 yuan ($1,474) a month in 2017 down to less than 5,000 yuan ($737). "I've definitely controlled my own spending, going out to eat less, buying less, cutting down on these things," he said, adding he believes things will turn around this year with new car models coming out. Job crunch Official data shows unemployment at a stable rate, rising slightly to 4.9 per cent last month. But independent data paints a different picture. In October-December advertised tech positions fell by 20 per cent from a year earlier, after declining 51 per cent in the third quarter, according to data from Zhaopin, China's largest recruitment website and Renmin University. China's economy "faces downward pressure, and to some extent, this pressure will be transmitted to the job market," said Meng Wei, a spokeswoman for the National Development and Reform Commission, China's state planner. A lawyer who consults on labour disputes, Guo Xuehai of Beijing Zhonghai Law Firm, said, "there are definitely more employees coming for help than before," but added this was usually the case at this time of the year. At Beijing Yixin, Cui said he could only afford to pay his 30-odd employees 70 per cent of their salaries as money ran out in November. By December he paid them nothing and this month he cut their insurance and benefit plan, unofficially firing them. "We worked 9 am to 9 pm plus Saturdays with no overtime pay and now no pay at all," said a 3D designer surnamed Li, who helped build Farm Take Home. Employees looking for new jobs have found that companies are not hiring at the moment. "Hopefully it will be better after Chinese New Year," Li said.

Businesses struggle as cracks appear in China's economy

Wall Street edged higher on Wednesday after <a href="http://www.wionews.com/world/wall-street-starts-new-year-with-1-percent-slide-on-global-slowdown-jitters-187942">stumbling out of the starting gate on the first trading day of 2019</a>, while fears of a global economic slowdown were exacerbated after Apple cut its holiday-quarter revenue forecast.

Apple&nbsp;dropped 8 per cent in extended trading late in the day after the iPhone maker slashed its outlook for the December quarter, blaming weak demand in China.

Shares of Apple's suppliers also fell, and S&amp;P 500 futures&nbsp;dropped 1.3 per cent, signalling that Wednesday's modest advance could unwind when the market reopens on Thursday.

"To see Apple's sales drop off this much says something about the Chinese economy," said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. "Any company that does business in China will feel the impact of this."

Stocks had started the session lower after separate reports showed a deceleration in factory activity in China and the euro zone, indicating the ongoing trade dispute between the United States and China was taking a toll on global manufacturing.

Energy stocks led the S&amp;P 500's advance and the sector was the index's biggest percentage gainer, buoyed by a 2.4 per cent jump in crude prices. The group was the worst performing S&amp;P sector in 2018.

Gains were offset by healthcare&nbsp;and so-called defensive sectors, such as real estate, utilities&nbsp;and consumer staples. Healthcare companies provided the biggest drag on the S&amp;P 500 and the Dow.

The Dow Jones Industrial Average&nbsp;rose 18.78 points, or 0.08 per cent, to 23,346.24, the S&amp;P 500&nbsp;gained 3.18 points, or 0.13 per cent, to 2,510.03 and the Nasdaq Composite&nbsp;added 30.66 points, or 0.46 per cent, to 6,665.94.

Of the 11 major sectors in the S&amp;P 500, seven closed in positive territory.

Banks got a boost from Barclays, as the broker wrote in a research note that the sector could outperform the S&amp;P this year. The Dow Jones Industrial average was led higher with gains from Goldman Sachs&nbsp;and JPMorgan.

Tesla Inc&nbsp;delivered fewer-than-expected Model 3 sedans in the fourth quarter and cut US&nbsp;prices. The electric automaker's shares slid 6.8 per cent.

General Electric Co&nbsp;jumped 6.3 per cent in heavy trading as bargain hunters bought the stock in the wake of its over 50-per cent plunge in 2018.

In the coming weeks, the fourth-quarter reporting period will get underway. Analysts see S&amp;P 500 companies posting profit gains of 15.8 per cent, significantly smaller than the third quarter's 28.4 per cent advance.

Advancing issues outnumbered declining ones on the NYSE by a 2.10-to-1 ratio; on Nasdaq, a 2.42-to-1 ratio favoured advancers.

The S&amp;P 500 posted no new 52-week highs and 4 new lows; the Nasdaq Composite recorded 9 new highs and 58 new lows.

Volume on US&nbsp;exchanges was 7.80 billion shares, compared to the 9.18 billion average for the full session over the last 20 trading days.

Apple dropped 8 per cent in extended trading late in the day after the iPhone maker slashed its outlook for the December quarter, blaming weak demand in China.

Wall Street edged higher on Wednesday after stumbling out of the starting gate on the first trading day of 2019, while fears of a global economic slowdown were exacerbated after Apple cut its holiday-quarter revenue forecast. Apple dropped 8 per cent in extended trading late in the day after the iPhone maker slashed its outlook for the December quarter, blaming weak demand in China. Shares of Apple's suppliers also fell, and S&P 500 futures dropped 1.3 per cent, signalling that Wednesday's modest advance could unwind when the market reopens on Thursday. "To see Apple's sales drop off this much says something about the Chinese economy," said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. "Any company that does business in China will feel the impact of this." Stocks had started the session lower after separate reports showed a deceleration in factory activity in China and the euro zone, indicating the ongoing trade dispute between the United States and China was taking a toll on global manufacturing. Energy stocks led the S&P 500's advance and the sector was the index's biggest percentage gainer, buoyed by a 2.4 per cent jump in crude prices. The group was the worst performing S&P sector in 2018. Gains were offset by healthcare and so-called defensive sectors, such as real estate, utilities and consumer staples. Healthcare companies provided the biggest drag on the S&P 500 and the Dow. The Dow Jones Industrial Average rose 18.78 points, or 0.08 per cent, to 23,346.24, the S&P 500 gained 3.18 points, or 0.13 per cent, to 2,510.03 and the Nasdaq Composite added 30.66 points, or 0.46 per cent, to 6,665.94. Of the 11 major sectors in the S&P 500, seven closed in positive territory. Banks got a boost from Barclays, as the broker wrote in a research note that the sector could outperform the S&P this year. The Dow Jones Industrial average was led higher with gains from Goldman Sachs and JPMorgan. Tesla Inc delivered fewer-than-expected Model 3 sedans in the fourth quarter and cut US prices. The electric automaker's shares slid 6.8 per cent. General Electric Co jumped 6.3 per cent in heavy trading as bargain hunters bought the stock in the wake of its over 50-per cent plunge in 2018. In the coming weeks, the fourth-quarter reporting period will get underway. Analysts see S&P 500 companies posting profit gains of 15.8 per cent, significantly smaller than the third quarter's 28.4 per cent advance. Advancing issues outnumbered declining ones on the NYSE by a 2.10-to-1 ratio; on Nasdaq, a 2.42-to-1 ratio favoured advancers. The S&P 500 posted no new 52-week highs and 4 new lows; the Nasdaq Composite recorded 9 new highs and 58 new lows. Volume on US exchanges was 7.80 billion shares, compared to the 9.18 billion average for the full session over the last 20 trading days.

Wall Street ekes out gains, Apple cuts revenue forecast after the bell

China's exports increased far less than expected in November, apparently indicating that slowing global demand outweighed any gains from a rush to ship goods to the United States ahead of a now-postponed Jan. 1 increase in Washington's import tariffs.

Import growth also fall sharply in November to the slowest pace since October 2016, which signals continuing weakness in domestic demand and could prompt Chinese policymakers to increase efforts to lift it to aid the slowing economy.

The November headline trade numbers came out less than a week after Presidents Donald Trump and Xi Jinping agreed to a 90-day truce delaying the planned Jan. 1 U.S. hike of tariffs to 25 per cent from 10 per cent on $200 billion of Chinese goods while they negotiate a trade deal.

November exports rose 5.4 per cent from a year earlier, Chinese customs data showed on Saturday, the weakest performance since a 3 per cent contraction in March.

Exports had risen 15.6 per cent in October from a year earlier, and a Reuters poll of 26 economists had forecast November shipments from the world's largest exporter would increase 10 per cent.

Growth in imports for November slowed sharply to 3.0 per cent from a 21.4 jump in October, and far missed analysts' forecast of 14.5 per cent.

Weakened shipments

This year, China's overall export growth has been stronger than expected in almost every month. Many economists attributed strength in recent months to front-loading of cargoes to the United States in anticipation of even higher tariffs.

Shipments of Chinese goods on an earlier U.S. tariff list targeting $50 billion of products have already weakened sharply, but that has been offset by a rush of shipments on a later list affecting the $200 billion, according to analysts from Capital Economics.

Also, the Chinese yuan has weakened more than 5 per cent against the dollar so far this year, helping to make Chinese products more competitive abroad.

However, a weakening global demand especially those from Japan and Europe might have cast shadow on the export engine in November.

China's trade surplus with the United States was $35.55 billion in November, a record high and compared with $31.78 billion in the preceding month.

For trade with all countries, China's surplus was $44.74 billion for November, compared with forecasts of $34 billion and October's surplus of $34.02 billion.

On Thursday, the U.S. reported that its trade deficit in October jumped to a 10-year high, and that the deficit with China that last month surged 7.1 percent to a record $43.1 billion.

China's exports increased far less than expected in November, apparently indicating that slowing global demand outweighed any gains from a rush to ship goods to the United States ahead of a now-postponed Jan.

China's exports increased far less than expected in November, apparently indicating that slowing global demand outweighed any gains from a rush to ship goods to the United States ahead of a now-postponed Jan. 1 increase in Washington's import tariffs. Import growth also fall sharply in November to the slowest pace since October 2016, which signals continuing weakness in domestic demand and could prompt Chinese policymakers to increase efforts to lift it to aid the slowing economy. The November headline trade numbers came out less than a week after Presidents Donald Trump and Xi Jinping agreed to a 90-day truce delaying the planned Jan. 1 U.S. hike of tariffs to 25 per cent from 10 per cent on $200 billion of Chinese goods while they negotiate a trade deal. November exports rose 5.4 per cent from a year earlier, Chinese customs data showed on Saturday, the weakest performance since a 3 per cent contraction in March. Exports had risen 15.6 per cent in October from a year earlier, and a Reuters poll of 26 economists had forecast November shipments from the world's largest exporter would increase 10 per cent. Growth in imports for November slowed sharply to 3.0 per cent from a 21.4 jump in October, and far missed analysts' forecast of 14.5 per cent. Weakened shipments This year, China's overall export growth has been stronger than expected in almost every month. Many economists attributed strength in recent months to front-loading of cargoes to the United States in anticipation of even higher tariffs. Shipments of Chinese goods on an earlier U.S. tariff list targeting $50 billion of products have already weakened sharply, but that has been offset by a rush of shipments on a later list affecting the $200 billion, according to analysts from Capital Economics. Also, the Chinese yuan has weakened more than 5 per cent against the dollar so far this year, helping to make Chinese products more competitive abroad. However, a weakening global demand especially those from Japan and Europe might have cast shadow on the export engine in November. China's trade surplus with the United States was $35.55 billion in November, a record high and compared with $31.78 billion in the preceding month. For trade with all countries, China's surplus was $44.74 billion for November, compared with forecasts of $34 billion and October's surplus of $34.02 billion. On Thursday, the U.S. reported that its trade deficit in October jumped to a 10-year high, and that the deficit with China that last month surged 7.1 percent to a record $43.1 billion.

China's November export, import growth shrinks; surplus with US record high

China's newly-released opening-up measures have nothing to do with the ongoing trade friction with the United States, said Gao Feng, spokesman of Chinese Ministry of Commerce.

Gao made the remarks Thursday at a regular press conference over the recent trade friction between China and the US.

"China's major strategic decisions of opening-up are made based on an accurate estimation of the country's current development level, which is a major strategic decision to elevate opening-up in the new era to a higher level, and is for its own sake. It has nothing to do with the trade friction with the US," said Gao.

Gao said China has scored remarkable success since it carried out reform and opening up, noting that China can develop only through reform and opening up, which is a basic state policy and also shows its responsibility to the world development.

"The opening up measures are totally China's proactive moves, which enable countries around the world to board the express train of China's economic development. We hope some Americans do not misjudge the situation. China's opening up won't be disrupted by any external pressure," said Gao.

China's Ministry of Commerce said the country had scored remarkable success since it carried out reform and opening up, noting that China can develop only through reform

China's newly-released opening-up measures have nothing to do with the ongoing trade friction with the United States, said Gao Feng, spokesman of Chinese Ministry of Commerce. Gao made the remarks Thursday at a regular press conference over the recent trade friction between China and the US. "China's major strategic decisions of opening-up are made based on an accurate estimation of the country's current development level, which is a major strategic decision to elevate opening-up in the new era to a higher level, and is for its own sake. It has nothing to do with the trade friction with the US," said Gao. Gao said China has scored remarkable success since it carried out reform and opening up, noting that China can develop only through reform and opening up, which is a basic state policy and also shows its responsibility to the world development. "The opening up measures are totally China's proactive moves, which enable countries around the world to board the express train of China's economic development. We hope some Americans do not misjudge the situation. China's opening up won't be disrupted by any external pressure," said Gao.

Decision to open economy not related to trade friction with US: China

India will overtake China to be the fastest growing large economy in 2018 and the country&#39;s equity market will become the fifth largest in the world, says a report.

According to a Sanctum Wealth Management report, when the rest of the world offers low growth and insufficient structural change, India, by contrast, is seen as a reforming economy with the prospect of strong long-term growth.

&quot;India will become the fastest growing large economy in the world, eclipsing China. Indian equity market will jump to become the fifth largest in the world,&quot; the report noted.

At a time when developed economies are cheering 2-3 per cent growth, India is focused on breaching 7.5 per cent, it said.

Moreover, India also benefits from a favourable contrast to other emerging markets. In particular, the fact that China is downshifting to a slower pace of growth.

&quot;Prospective returns for equities are much higher than the 6-8 per cent that one can expect from fixed income,&quot; it noted.

However, if inflation or rates rise, markets are not likely to register further gains.

Muted earning could also impact market performance.

&quot;Considering the fact that Nifty50 is in a broader uptrend, a sustained move beyond the 10,490-10,580 levels could lead to a rally towards 11,200-11,500 levels in the medium term,&quot; it noted.

As per the report, a major factor that has changed is that the domestic buyer now sets market prices. Domestic mutual funds bought equities worth $15.3 billion against $8 billion by foreign investors in 2017.

The report that identifies various big-picture trends at play this year in the domestic and global economy, noted that Aadhaar, Jan Dhan, demonetisation, GST, are working to create a new inclusive infrastructure in India.

&quot;Given the rapid pace at which the Indian economy is developing, investors today are faced with the need to make crucial investment decisions amidst multiple cross-currents, using a complex array of choices,&quot; Sanctum Wealth Management Chief Executive Officer Shiv Gupta said.

At a time when developed economies are cheering 2-3 per cent growth, India is focused on breaching 7.5 per cent, it said

India will overtake China to be the fastest growing large economy in 2018 and the country's equity market will become the fifth largest in the world, says a report. According to a Sanctum Wealth Management report, when the rest of the world offers low growth and insufficient structural change, India, by contrast, is seen as a reforming economy with the prospect of strong long-term growth. "India will become the fastest growing large economy in the world, eclipsing China. Indian equity market will jump to become the fifth largest in the world," the report noted. At a time when developed economies are cheering 2-3 per cent growth, India is focused on breaching 7.5 per cent, it said. Moreover, India also benefits from a favourable contrast to other emerging markets. In particular, the fact that China is downshifting to a slower pace of growth. "Prospective returns for equities are much higher than the 6-8 per cent that one can expect from fixed income," it noted. However, if inflation or rates rise, markets are not likely to register further gains. Muted earning could also impact market performance. "Considering the fact that Nifty50 is in a broader uptrend, a sustained move beyond the 10,490-10,580 levels could lead to a rally towards 11,200-11,500 levels in the medium term," it noted. As per the report, a major factor that has changed is that the domestic buyer now sets market prices. Domestic mutual funds bought equities worth $15.3 billion against $8 billion by foreign investors in 2017. The report that identifies various big-picture trends at play this year in the domestic and global economy, noted that Aadhaar, Jan Dhan, demonetisation, GST, are working to create a new inclusive infrastructure in India. "Given the rapid pace at which the Indian economy is developing, investors today are faced with the need to make crucial investment decisions amidst multiple cross-currents, using a complex array of choices," Sanctum Wealth Management Chief Executive Officer Shiv Gupta said.

India to overtake China as fastest growing large economy in 2018: Report

China will deepen economic and financial reforms and further open its markets to foreign investors as it looks to move from high-speed to high-quality growth, President Xi Jinping said on Wednesday.

China will push ahead with market-oriented reforms of its foreign exchange rate as well as its financial system, and let the market play a decisive role in the allocation of resources, Xi said at the opening of a key, twice-a-decade Communist Party Congress.

&quot;China&#39;s open door will not be closed, it will be only be opened wider,&quot; Xi said.

The government will &quot;clean up rules and practices that hinder a unified market and fair competition, support development of private firms and stimulate vitality of all types of market entities,&quot; Xi said, while pledging to further open China&#39;s services sector to foreign investors.

However, while expressing support for market reform and private firms, Xi also called for stronger, bigger state firms.

The government will &quot;promote strengthening, improvement and expansion of state capital, (and) effectively prevent loss of state assets, deepen reform of state-owned enterprises, development a mixed-ownership economy and cultivate globally competitive world-class firms,&quot; Xi said.

Xi&#39;s comments reiterated a long-standing pledge by party leaders to give a greater role to free-market forces to improve efficiency and put the economy on a more sustainable growth path.

But as Xi gears up for his second five-year term, foreign business executives and analysts increasingly believe market liberalization is seen as secondary to his state-centred approach to economic policy and his focus on stability.

Other painful reforms that many economists say are needed have also moved slowly under Xi. They include overhauling China&#39;s bloated and debt-laden state sector, fixing the fiscal system to tackle local government debt and bringing in new property taxes to ward off housing bubbles.

Narrowing the income gap

China should also strengthen consumption as a foundation for economic development, Xi said, and will expand the middle class and narrow the gap in development between rural and urban areas.

Beijing&#39;s campaign to rein in high debt levels and industrial overcapacity will continue as part of supply-side structural reforms, Xi said.

Fiscal reform has also been a key objective of policymakers as Beijing tries to make local governments take more responsibility for their own budgets and debt.

China is expected to post its strongest economic growth in several years this year, riding on a government-led construction boom, but analysts said it is still relying to heavily on credit-fueled stimulus.

Standard &amp; Poor&#39;s ratings agency said on Tuesday that China has only taken &quot;baby steps&quot; to contain its rapid build-up in debt so far and needs to take stronger measures.

S&amp;P downgraded the country&#39;s sovereign credit rating last month, saying its credit growth is still too fast.

Xi said the government will &quot;speed up establishment of modern fiscal system, set up clear responsibility, financial coordination and regional balance for fiscal relationship between local and central government.&quot;

Xi was speaking at the five-yearly congress of the Chinese Communist Party

China will deepen economic and financial reforms and further open its markets to foreign investors as it looks to move from high-speed to high-quality growth, President Xi Jinping said on Wednesday. China will push ahead with market-oriented reforms of its foreign exchange rate as well as its financial system, and let the market play a decisive role in the allocation of resources, Xi said at the opening of a key, twice-a-decade Communist Party Congress. "China's open door will not be closed, it will be only be opened wider," Xi said. The government will "clean up rules and practices that hinder a unified market and fair competition, support development of private firms and stimulate vitality of all types of market entities," Xi said, while pledging to further open China's services sector to foreign investors. However, while expressing support for market reform and private firms, Xi also called for stronger, bigger state firms. The government will "promote strengthening, improvement and expansion of state capital, (and) effectively prevent loss of state assets, deepen reform of state-owned enterprises, development a mixed-ownership economy and cultivate globally competitive world-class firms," Xi said. Xi's comments reiterated a long-standing pledge by party leaders to give a greater role to free-market forces to improve efficiency and put the economy on a more sustainable growth path. But as Xi gears up for his second five-year term, foreign business executives and analysts increasingly believe market liberalization is seen as secondary to his state-centred approach to economic policy and his focus on stability. Other painful reforms that many economists say are needed have also moved slowly under Xi. They include overhauling China's bloated and debt-laden state sector, fixing the fiscal system to tackle local government debt and bringing in new property taxes to ward off housing bubbles. Narrowing the income gap China should also strengthen consumption as a foundation for economic development, Xi said, and will expand the middle class and narrow the gap in development between rural and urban areas. Beijing's campaign to rein in high debt levels and industrial overcapacity will continue as part of supply-side structural reforms, Xi said. Fiscal reform has also been a key objective of policymakers as Beijing tries to make local governments take more responsibility for their own budgets and debt. China is expected to post its strongest economic growth in several years this year, riding on a government-led construction boom, but analysts said it is still relying to heavily on credit-fueled stimulus. Standard & Poor's ratings agency said on Tuesday that China has only taken "baby steps" to contain its rapid build-up in debt so far and needs to take stronger measures. S&P downgraded the country's sovereign credit rating last month, saying its credit growth is still too fast. Xi said the government will "speed up establishment of modern fiscal system, set up clear responsibility, financial coordination and regional balance for fiscal relationship between local and central government."

Xi: China will continue to open economy, deepen financial reforms

China&#39;s policymakers and leading economists today voiced concerns about Britain&#39;s vote to leave the European Union, with the finance minister saying it has heightened market uncertainty, though some expect a limited impact on the Chinese economy. 
 
The &quot;Brexit&quot; decision &quot;will cast a shadow over the global economy ... The repercussions and fallout will emerge in the next five to 10 years,&quot; said Lou Jiwei, China&#39;s minister of finance, at the first annual meeting of the Asian Infrastructure Investment Bank in Beijing. 
 
&quot;It&#39;s difficult to predict now,&quot; he said. &quot;The knee-jerk reaction from the market is probably a bit excessive and needs to calm down and take an objective view.&quot; 
 
Stock markets around the world plunged in the wake of the referendum. Sterling&#39;s value also plummeted. 
 
Lou&#39;s views were echoed by the head of China&#39;s top economic planning authority and other economists at the World Economic Forum (WEF) in the northern city of Tianjin. 
 
&quot;For Chinese firms that are going to invest or carry out mergers, entrepreneurs are smarter than me, and they will definitely wait and see,&quot; Xu Shaoshi, chairman of the National Development and Reform Commission, said at WEF today. 
 
&quot;The Brexit incident wil affect China&#39;s economy via investment, trade and capital,&quot; he said. &quot;But I believe the impact will not be big and relevant government departments have made contingency plans.&quot; 
 
Huang Yiping, a professor at Peking University and a member of the central bank&#39;s monetary policy committee, said it is hard to judge the direct impact of the British referendum on China&#39;s economy. 
 
&quot;If (Brexit) is an important landmark in terms of a reversal of globalisation, I think that&#39;s very bad for the world, it&#39;s very bad for China,&quot; Huang said. 
 
Li Daokui, a professor at Tsinghua University and a former adviser to China&#39;s central bank, was more optimistic on the referendum&#39;s effects on the world&#39;s second-largest economy. 
 
&quot;China is perhaps one of the least impacted economies in the world by the event of Brexit,&quot; he told an audience at WEF. 
 
&quot;The only short-term impact I can think about is the exchange rate of the Renminbi ... But I do think within a few trading sessions that situation will very quickly be subdued,&quot; Li said. 
 
Also speaking at WEF was economist Nouriel Roubini, famed for predicting the global financial crisis, who said the decision to leave the European Union &quot;creates a whole bunch of financial, economic, political and geopolitical uncertainties.&quot; 
 
It could be the &quot;beginning of the disintegration&quot; of the bloc of countries, the euro zone or the United Kingdom, said Roubini. 
 
&quot;I don&#39;t expect a global recession or another global financial crisis,&quot; he added. &quot;I think the impact of Brexit is significant but not of the same size and magnitude of the one we had 2007 to 2009.&quot; 
 
Michael Falcon, CEO of Global Investment Management Asia Pacific at JP Morgan, said he expects more market volatility but doubts the vote will derail a global recovery. 
 
&quot;It is a shock, not a crisis, and so far markets seem to be handling this pretty well,&quot; Falcon said at the WEF conference. 
 
(Reuters)

The repercussions and fallout will emerge in the next five to 10 years, said Lou Jiwei, China's finance minister

China's policymakers and leading economists today voiced concerns about Britain's vote to leave the European Union, with the finance minister saying it has heightened market uncertainty, though some expect a limited impact on the Chinese economy. The "Brexit" decision "will cast a shadow over the global economy ... The repercussions and fallout will emerge in the next five to 10 years," said Lou Jiwei, China's minister of finance, at the first annual meeting of the Asian Infrastructure Investment Bank in Beijing. "It's difficult to predict now," he said. "The knee-jerk reaction from the market is probably a bit excessive and needs to calm down and take an objective view." Stock markets around the world plunged in the wake of the referendum. Sterling's value also plummeted. Lou's views were echoed by the head of China's top economic planning authority and other economists at the World Economic Forum (WEF) in the northern city of Tianjin. "For Chinese firms that are going to invest or carry out mergers, entrepreneurs are smarter than me, and they will definitely wait and see," Xu Shaoshi, chairman of the National Development and Reform Commission, said at WEF today. "The Brexit incident wil affect China's economy via investment, trade and capital," he said. "But I believe the impact will not be big and relevant government departments have made contingency plans." Huang Yiping, a professor at Peking University and a member of the central bank's monetary policy committee, said it is hard to judge the direct impact of the British referendum on China's economy. "If (Brexit) is an important landmark in terms of a reversal of globalisation, I think that's very bad for the world, it's very bad for China," Huang said. Li Daokui, a professor at Tsinghua University and a former adviser to China's central bank, was more optimistic on the referendum's effects on the world's second-largest economy. "China is perhaps one of the least impacted economies in the world by the event of Brexit," he told an audience at WEF. "The only short-term impact I can think about is the exchange rate of the Renminbi ... But I do think within a few trading sessions that situation will very quickly be subdued," Li said. Also speaking at WEF was economist Nouriel Roubini, famed for predicting the global financial crisis, who said the decision to leave the European Union "creates a whole bunch of financial, economic, political and geopolitical uncertainties." It could be the "beginning of the disintegration" of the bloc of countries, the euro zone or the United Kingdom, said Roubini. "I don't expect a global recession or another global financial crisis," he added. "I think the impact of Brexit is significant but not of the same size and magnitude of the one we had 2007 to 2009." Michael Falcon, CEO of Global Investment Management Asia Pacific at JP Morgan, said he expects more market volatility but doubts the vote will derail a global recovery. "It is a shock, not a crisis, and so far markets seem to be handling this pretty well," Falcon said at the WEF conference. (Reuters)

China's finance minister sees 'Brexit' heightening uncertainty for markets

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