China's President, Asian CEOs Soften Long-Term Growth Expectations

• China's ruling party said on Tuesday it expects to grow the economy by 6.5 percent per annum from 2016 to 2020 as part of its new five-year outlook.
• As part of China's five-year plan ending in 2015, the ruling party set a growth target of 7 percent per annum.
• Separately, a global survey of CEOs found a drop in confidence among Asian executives with China's slower growth cited as a main concern.

China's President Xi Jinping said on Tuesday that the Community Party is now targeting a 6.5 percent growth target for economic growth from 2016 to 2020.

China's ruling government reveals a five-year outlook and growth forecast. For the five-year period ending in 2015, the government projected it will grow the economy by 7 percent per year.

China's economy grew 6.9 percent in the third quarter of this year.

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As part of the new five-year plan, China's government expects the country's gross domestic product and per capita income in 2020 to be double what they were at the start of the decade. The ruling party has also set an objective of eradicating rural poverty, promote the inclusion of its national currency (the renminbi) within the International Monetary Fund's basket of currencies, attract foreign investments, and encourage local businesses to invest internationally.

The party also said that the establishment of a new "Green Development Fund" is necessary to promote clean industry and sustainable growth.

'Steep Decline' In Confidence Among CEOs

News of a 6.5 percent growth forecast may disappoint some investors and further sheds doubt on the country's ability to return to a near double-digit growth outlook any time soon.

Further exasperating investors is a new study by Young Presidents' Organization, a global network of young CEOs across more than 125 countries.

The YPO Global Pulse Index for Asia, a measure of economic confidence among CEOs in the region fell to 57.3 from 62.0 in the third quarter. This marks the largest drop seen in any region across the world and is the fifth consecutive quarterly decline and the lowest level of confidence reported by YPO leaders in Asia since the survey began six years ago.

CEOs cited slower growth in China as a main driver of reduced confidence. In addition, stock market fluctuations have caused business leaders in Asia to become "nervous."

Confidence of YPO members in China fell eight points in the third quarter to 52.7.

"As China struggles to transform from an industrial-based economy to a consumer-driven model, confidence in Asia has been adversely affected by the tight inverse relationship between the value of the U.S. dollar and commodity prices," said Leon Teoh, managing director of Fortson Sdn Bhd and a member of the YPO SEA Dragon chapter.

The survey concluded did, however, conclude that while the outlook for Asia may not be as optimistic as it has been in the past, it "cannot be characterized as pessimistic."