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China's Xi says 'ultra-high speed' growth probably over

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(Globalpost/GlobalPost)

China's President Xi Jinping said Monday the days of "ultra-high speed" growth in the world's second-largest economy -- which many hope can spur a global recovery -- are probably over.

"I don't think we will be able to sustain an ultra-high speed of economic growth and it is not what we want either," Xi told about two dozen foreign business figures on the southern island of Hainan.

"Still it is possible for us to sustain a relatively high speed of economic growth," he added. "The Chinese economy is in good shape."

China has recorded annual average growth of 9.9 percent since the country began opening up its economy, he said, describing the feat as "rarely seen in the history of world economic development".

Factors such as urbanisation, continuing industrialisation and the modernisation of agriculture were cause for optimism regarding the future "upward trajectory" of the economy, he said.

But he did not elaborate on what his terms regarding growth rates meant in exact figures.

Xi became president last month after ascending to the leadership of the ruling Communist Party in November. He was speaking at a meeting held as part of the Boao Forum for Asia, an annual gathering of political and economic leaders.

Beijing has been involved in a series of rows with the European Union and United States over issues ranging from trade disputes to cyberspying, and Californian technology giant Apple was recently repeatedly condemned in Chinese state media.

During the Boao event, Zein Abdalla, president of PepsiCo, told Xi of "rising concern" among foreign investors "about increasing restrictions on the types of investment we can make", citing agriculture in particular.

But Xi said China would "protect the lawful rights and interests of foreign-invested companies" and "ensure their rights to equal participation in government procurement and independent innovation".

"China will never close its door to the outside world," he added. "Now that we have opened this door we will not close it, not for now and not in the future.

"China will keep its door open to foreign investors and likewise we also hope that foreign countries will further open the door to Chinese investors."

China's huge annual trade surpluses have seen it accumulate the world's largest foreign exchange reserves.

The economy grew at its slowest pace in 13 years in 2012, with gross domestic product expanding 7.8 percent in the face of weakness at home and in key overseas markets. Its target for 2013 is 7.5 percent, the same as last year's.

Xi said the figure was lower than in previous years, "partly due to our efforts to control the speed of economic growth and speed up the transformation of the growth model".

"We will shift the focus of economic development to quality and efficiency," he added.

China's leaders have repeatedly vowed to retool the economic model to emphasise consumer demand as the key growth driver rather than investment and exports.

The Boao Forum has brought together leaders in government, business and academia in Asia and other continents every year since 2001 to discuss pressing issues in the region and the rest of the world.

At the meeting Koji Miyahara, chairman of Japanese shipping company NYK, indirectly raised last year's violent protests against Japanese businesses in China, spurred by tensions between the two over a territorial dispute.

Miyahara described them as an "unfortunate incident" and asked for Xi's understanding. The Chinese leader appeared to listen carefully as Miyahara spoke and nodded his head several times, but did not refer to the issue himself.

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http://www.globalpost.com/dispatch/news/afp/130408/chinas-xi-says-ultra-high-speed-growth-probably-over-1