Official calls for confidence in economy

Updated: 2012-02-18 13:59


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BEIJING -- An official on Friday tried to dispel pessimism over China's economic outlook, saying the world's second-largest economy will surely maintain steady and rapid growth this year thanks to great domestic demand potential.

The upbeat expectations of Li Pumin, a spokesman for the National Development and Reform Commission, came after some institutions, including the World Bank, warned of "downside risks" for China's economy in 2012.

Li, who is also a deputy secretary-general for China's top economic planner, spoke to Xinhua in an interview on the country's economic prospects this year amid worries of a worldwide slowdown.

"China has great domestic demand potential that has not been given full play, so I am very confident," Li said.

He said his confidence stemmed from the fundamental economic factors that propelled China's economy despite the mire of the European debt crisis and other global uncertainties in 2011.

Although slowing quarter by quarter, China's gross domestic product (GDP) still managed to expand by 9.2 percent in 2011, according to the National Bureau of Statistics (NBS).

Other economic indicators, such as fiscal revenue and industrial profits, all maintained robust growth last year.

According to the Ministry of Finance, China's fiscal revenue jumped 24.8 percent year-on-year to hit a record high of 10.37 trillion yuan ($1.64 trillion) in 2011, while NBS data showed that the nation's industrial profits increased 25.4 percent year-on-year last year.

"The slowing GDP growth is in line with the expected direction that the country's macro control policies were designed to steer," Li said, adding that the 9.2-percent growth of China's economy still outpaced that of any of the world's other major economies.

He noted that China's rapid process of industrialization, urbanization and agricultural modernization requires "reasonable growth" in investments to expand domestic demand and improve people's living standards, thus creating huge potential for domestic consumption.

"With such great potential and favorable conditions, China's economy will maintain steady and rapid growth this year and for quite a while in the future," Li said.

An improved social security net and a vibrant job market will also encourage Chinese to spend more in other sectors, he said.

According to the Ministry of Human Resources and Social Security, China's pension insurance system is expected to be expanded throughout the country this year after more than 360 million people in rural and urban areas had been covered by the system by the end of 2011.

Furthermore, 12.21 million new jobs were created in cities and towns last year, with a registered urban unemployment rate of 4.1 percent, which was below the government's full-year target of 4.6 percent.

China's social security net that insures pension, medicare, unemployment benefits, work-related injury compensation and maternity pay will be installed this year.

Despite such favorable conditions, Li said, China still needs to shift from policy stimulus to economic restructuring to fuel its intrinsic growth.

"With an increasingly unstable external environment, China's economy does face pressure for a slowdown this year," Li said, "but we need to take this opportunity and restructure our economy to stabilize growth."