President Xi Jinping warned of “severe” challenges while laying out a road map to turn China into a leading global power by 2050, as he kicked off a twice-a-decade party gathering expected to cement his influence into the next decade.

In a speech that ran for more than three hours on Wednesday, Xi declared victory over “many difficult, long overdue problems” since he took power in 2012. He said China would continue opening its doors to foreign businesses, defend against systemic risks, deepen reforms of state-run enterprises, strengthen regulation of the financial sector and better coordinate fiscal and monetary policy.

“Right now both China and the world are in the midst of profound and complex changes,” Xi said. “China is still in an important period of strategic opportunity for development. The prospects are bright, but the challenges are severe.”

Xi Jinping speaks during the opening of the 19th National Congress of the Communist Party of China on Oct. 18.

Photographer: Qilai Shen/Bloomberg

At stake is whether Xi will amass enough power to push through tough reforms as the world’s second-largest economy faces structural challenges over the next five years. At the same time, he’s seeking to boost China’s global clout with infrastructure spending while seeking to avoid a conflict with U.S. President Donald Trump over North Korea.

Reaction to the speech in markets was muted, with the benchmark Shanghai Composite Index adding 0.3 percent at the 11:30 a.m. local time break, while the yuan rose 0.2 percent against the dollar.

Bloomberg TV’s Tom Mackenzie explains the path to power in China.

(Source: Bloomberg)

“We have a fairly clear blueprint of Xi Jinping’s political economy, with incredibly robust, strengthened state-owned sector playing a large role in propping up growth,” Jude Blanchette, engagement director at the Conference Board’s China Center, said in a Bloomberg Television interview. “We’re moving into a sort of China Inc. 2.0, a real upgraded version. That, sure, has markets and they’re going to play a really important role in this, but this is all within a birdcaged economy.”

While economic growth has surprised on the upside in recent quarters, inefficient state-owned enterprises and ballooning corporate debt pose threats to stability. Last year, China saw its slowest full-year growth in about a quarter century, and S&P Global Ratings last month cut China’s sovereign rating for the first time since 1999.

Xi is set to emerge as one of the country’s top three leaders along with Deng Xiaoping and Mao Zedong, who founded the People’s Republic of China in 1949. He’ll be looking to secure a majority of allies on the new Standing Committee, which may potentially include possible successors who could rule until 2032.

Xi’s speech — officially known as the party work report, China’s most important policy document — included sections on politics, the economy, national defense, foreign policy and Hong Kong and Taiwan. He painted China’s governance system as a unique development model while hailing signature policies like his Belt-and-Road infrastructure initiative and anti-corruption campaign, which has ensnared some 1 million officials since 2012 and sidelined many of his would-be rivals.

Xi affirmed the Communist Party’s supremacy and said that China shouldn’t copy the political systems of foreign nations, repeatedly emphasizing that the country had entered a “new era of socialism with Chinese characteristics.” He called for the rejection of the “Cold War mentality” in addressing global challenges, and said China would never seek global hegemony.

‘Beautiful China’

He reiterated the goal of attaining “moderately prosperous society” by 2020 and laid out an ambitious plan to make China a “great modern socialist country” in the following 30 years — part of what he has called the “Chinese dream.”

By 2050, he said, the party would be near the goal of achieving a “beautiful China” with the rule of law, innovative companies, a clean environment, an expanding middle class, adequate public transportation and reduced disparities between urban and rural areas.

“Chinese people will enjoy greater happiness and well-being, and the Chinese nation will stand taller and firmer in the world,” Xi said of his vision for 2050.

Throughout the week, more than 2,000 delegates to 19th Party Congress will discuss and approve Xi’s report and revisions to the party charter. They will also appoint a new Central Committee, which will elect the party’s Politburo and its Standing Committee — China’s most powerful body — the day after the congress ends on Oct. 24.

A man poses for a photo outside the Beijing Exhibition Center showing the “Five Years of Sheer Endeavor” exhibition.

Photographer: Qilai Shen/Bloomberg

Xi is more concerned about maintaining social stability than long-term economic growth, Yao Wei, chief China economist at Societe Generale SA, said before the speech Wednesday.

“If you look at what he’s said the past five years and some of the reform he’s been doing especially this year, it’s quite clear to us he’s not a strong believer in the free market,” Yao told Bloomberg Television in Hong Kong. “He’s more about the party leads everything. That’s really the first, most important principle when it comes to economics.”

— With assistance by Keith Zhai, Peter Martin, Jeff Kearns, David Tweed, Enda Curran, and Xiaoqing Pi

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