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Xi, Turnbull expected to hold talks

AAP logoAAP 3/09/2016 Paul Osborne, AAP Senior Political Writer

Malcolm Turnbull will seek insight into how China plans to sustain its economic growth, which is pivotal to Australia, when he meets with President Xi Jinping.

President Xi will host the G20 leaders' summit, starting in the eastern Chinese city of Hangzhou on Sunday afternoon.

Mr Turnbull's first major bilateral meeting of the two-day summit is expected to be with President Xi, where economic issues will jostle with security concerns.

Australia and the United States want China to respect international law when it comes to disputes in the South China Sea and not press ahead with the militarisation of atolls.

Mr Turnbull believes a peaceful South China Sea is essential for the future of trade.

President Xi told a B20 business forum in Hangzhou on Saturday China was committed to peaceful development.

"To seek harmony and coexistence has been in the genes of the Chinese nation throughout history, and it represents the very essence of eastern civilisation," he said.

The two leaders are also expected to discuss using innovation and the digital economy to spur global growth, as well as improving international tax transparency and ending corruption.

While China's growth is slowing, it continues to grow at 6.7 per cent.

The International Monetary Fund has assessed that without reform China's growth would continue to slow rather than stabilise after the end of the decade.

The country's response to falling private sector investment has been to increase public investment through state-owned enterprises.

President Xi told the B20 forum on Saturday his country planned to cut excess capacity in the steel and coal sectors.

He also pledged to let market forces play a greater role and internationalise the yuan.

But there are fears about the rise of China's debt levels - climbing 13 per cent a year and totalling more than 250 per cent of GDP.

Mr Turnbull and President Xi are also expected to discuss co-operation on climate action after the Chinese legislature voted on Saturday to ratify the Paris agreement.

There is also expected to be a bilateral meeting between Mr Turnbull and India's Prime Minister Narendra Modi on Sunday.

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