Xi Stresses Reining in Systemic Risks as China's Leaders Gather

(Bloomberg) -- President Xi Jinping said China will continue "seeking progress while maintaining stability" this year and that better supervision is needed to control financial risk, according to the official Xinhua News Agency.

Leaders will strive to improve the quality and efficiency of the economy and deepen supply-side structural reform, Xi said at a meeting of the Central Leading Group on Finance and Economic Affairs, Xinhua reported Tuesday. Xi also called for keeping the property market stable and promoting cuts in excess industrial capacity.

In addition, the meeting concluded that dealing with so-called zombie companies was pivotal to China's efforts to reduce overcapacity and equivalent to "grabbing the bull by the nose."

China's annual gathering of the legislature known as the National People's Congress gets under way this weekend in Beijing, where new targets for growth and inflation will be unveiled. Policy makers said after their Central Economic Work Conference in December that they planned prudent and neutral monetary policy and proactive fiscal policy this year as they aim to balance goals of ensuring steady growth with curbing excess leverage in the financial system.

The world's No. 2 economy has picked up in recent months as trade improves, producer prices continue to rebound and manufacturers remain upbeat. That gives policy makers more breathing room as they work to contain the credit boom that's fueled the resurgence.

To contact Bloomberg News staff for this story: Jeff Kearns in Beijing at jkearns3@bloomberg.net.

To contact the editors responsible for this story: Malcolm Scott at mscott23@bloomberg.net, Ken Wills, John Liu

With assistance from Jeff Kearns