Steady growth the goal for GDP

Updated: 2013-10-24 01:54

By LI YANG (China Daily)

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Chinese analysts believe that growth of the world's second-largest economy will stabilize at about 7.6 percent in the fourth quarter, with expansion to reach least 7.5 percent next year .

GDP increased 7.8 percent in the third quarter, 0.3 percentage point faster than in the first quarter and 0.1 points more than in the second quarter.

"Improvement in the leading indicators we follow, such as production of crude steel and vehicles, fixed-asset investment and new loans, as well as de-stocking, all indicate the economy will end up well in the fourth quarter," Fan Jianping, chief economist with the Beijing-based State Information Center, told a forum on Wednesday.

"But the slowing momentum of some leading indicators' rise means that growth will drop slightly from the third quarter's 7.8 percent."

Li Deshui, former director of the National Bureau of Statistics, said that the quality of growth is now more important than its speed.

"That's why President Xi Jinping and Premier Li Keqiang have said on different occasions that China should take the initiative to decelerate its economic growth to some extent, in exchange for... structural transformation and industrial upgrading," he said.

Fan said that GDP growth should be solid and steady, and that the government's methods of boosting growth should be sustainable and support the long-term benefit of the economy and social development.

Fixed-asset investment was up 20.2 percent year-on-year from January to September.

Reflecting on that statistic, Fan said: "We should not demonize investment's role in boosting growth. Investment will remain a powerful driving force for the Chinese economy in the next 10 years,amid mounting uncertainties over foreign demand."

But he stressed that the government must divert more funding into cash-hungry sectors such as technology, logistics and public health. The government should also improve the efficiency of investment by choosing targets that raise living standards, he added.

"The transformation of China's growth model will necessarily sacrifice some growth speed, which has been stoked by the easy money of real estate speculation or the revenue from polluting industries or sectors with excess capacity," Fan said.

He said that China must seek new growth sources by fostering modern manufacturing industries, modern service sectors and infrastructure construction in backward inland regions.

He also forecast that the central government won't launch any bailout package or large-scale stimulus policy as it did in 2008. Economic growth will settle at a range of 7.4 percent to 7.9 percent over the next few years, and no such actions are necessary.

"They should end their reliance on the old growth models. Otherwise, it is impossible for China to have a thorough de-stocking," Fan said.

Zheng Xinli, vice-chairman of the China Center for International Economic Exchanges, is optimistic about the growth outlook.

The government has set two key targets: the overall economy and per capita incomes should both double by 2020, compared with 2010.

"To fulfill the target, per capita incomes should grow at least 7.3 percent.

"According to my research on the relationship between per capita income growth and national economic growth since 1978, the Chinese economy should grow at least 8 percent each year till 2020," he said.

"The government has no choice but to make reform breakthroughs in thecrucial areas of consumption, taxation, innovation, finance, labor, land and urbanization," he said.

Zhou Qiren, an economist with Peking University, said that only when economic recoveries in the United States, Eurozone and Japan have proven to be sustainable, can the steady growth of the Chinese economy be guaranteed in the long run.

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