It looks like perhaps reality is finally setting in amongst the leadership in China, as Chinese government officials at the G20 finance ministers meeting in Ankara last week took pains to more thoroughly explain the reasoning behind their recent market-upsetting policy decisions and telegraph their future intentions. Analysts note the new, more open and realistic attitude about the Chinese economy is a first for China at a G20 meeting, whereas in the past the tone from officials has always been relentlessly positive.

China Shanghai

Leadership in China promises stability amid economic transition

Chinese Finance Minister Lou Jiwei reassured his colleagues at the G20 meeting regarding the current slowdown economic activity, noting that the government is “not especially concerned” about short-term fluctuations and will stick to its reform plans.

According to the Nikkei Asian Review, Lou also said at the G20 meeting that China’s economy will probably face difficult conditions for as long as a decade.

After the G20 meeting ended, the Chinese government released a statement over the weekend noting that Lou informed the global finance ministers that the next five years would be “labor pains” for the Chinese economy, and that the process of structural adjustment was likely to be long and difficult. The statement did not mention Lou’s “10 years” comment at the meeting.

Some analysts have already commented that it looks like China is setting the table for a lengthy slowdown, and the government is telegraphing it will go ahead with the reforms despite global financial markets facing serious instability as a result.

At earlier G-20 meetings, China had always offered a positive outlook, but apparently decided to provide a more realistic view this time given international criticism of its recent policy decisions.

When the meeting wound down on Saturday, Japan and a few other nations made public statements urging China to go ahead with structural reforms given how the recent move to devalue the yuan roiled global financial markets.

Sources in attendance in Ankara note that Lou and Zhou Xiaochuan, the governor of the People’s Bank of China, spent the first day of the meeting reviewing the condition and outlook of the Chinese economy.

The officials also outlined the idea of “a new normal,” where the world’s second largest economy will aim for stable growth driven by domestic demand instead of the investment and export-focused model of the past.

Of note, China is expected to offer many of the sought-for structural reforms in its upcoming five-year plan covering 2016 through 2020.