Speculation about China squashed during Xi's term

Updated: 2016-01-28 15:29


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Speculation about China squashed during Xi's term

As the first China-made large passenger aircraft, C919 with 158 seats is scheduled to make its maiden flight in January 2016. [Photo/IC]

China is already the world's second largest economy and any move will be the focus for the entire international community.

Over the years, there have been rumors and speculation about China, such as China's economic breakdown or "China threat" theory. But many have proved wrong.

Here we take a look at some rumors that have been squashed during President Xi Jinping's governance in the past three years.

Rumor quashed – the collapse of China's Economy

Will 2016 Bring the Collapse of China's Economy? is an article by Gordon G. Chang published by National Interest magazine in December that sparked a lot of debate.

Chang had written a book in 2001, making a prophecy that China's economy would break down.

Over the past year, whenever China was undergoing a period of economic transformation, theories of China's financial collapse would gain ground. And it is still the same case this time.

China has been committing to reconstructing its economy since 2013 and shift more attention to the quality of economic growth, which dropped naturally in the process.

But it also offered space for the spread of collapse of China's economy again. The slump in China's stock market made such voices even more clamorous.

Despite such clamor, Xi repeatedly said: "China's economic growth is at a reasonable level and there will be no hard landing".

China's GDP growth slowed to a 25-year low of 6.9 percent in 2015. But China's economy is still developing well if we take a look at the whole picture.

First of all, GDP growth is still at a reasonable pace around 7 percent. Furthermore, more new jobs were created in the period and resident income also saw relatively rapid growth.

Second, China's industrial structure is further improved. The service sector contributed more than 50 percent of GDP growth, which explains why the country's electricity and coal consumption dropped. So it's totally baseless to assess China's economic development according to electricity and coal consumption.

Finally, China's economic transformation gained momentum. The central government's policy of encouraging development of new industries offered more impetus to the economy. Online retail sales increased more than 30 percent in last year.

China does not blindly seek rapid economic growth, but wants to improve its economic structure under reasonable conditions. This kind of medium- and high-speed growth is still considerable and will continue to be a major source of power for the world's economy.

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