China’s economy is set for steady growth

The risk of a steep slide in China’s economy has reduced, the head of a government research center said on Sunday, adding the country had moved through an “L-shaped” pattern of slowing to now “horizontal” growth.
China’s economy grew 6.7 percent last year, according to the government, the slowest pace in 26 years. The country met its growth target with support from record bank loans, a speculative housing boom and billions in government investment.
But as Beijing moves to cool the housing market, slow new credit and tighten its purse strings, China will have to depend more on domestic consumption and private investment.
The government last week trimmed its economic growth target to about 6.5 percent for this year.
Li Wei, the director of the Development Research Center (DRC) of the State Council, China’s Cabinet, said many positive economic signs were emerging domestically and internationally, and the risk of a large slide in economic growth had “clearly lowered.”
China’s economic development has gone from a “downward stroke in the L-shape to the horizontal stroke,” the official Xinhua news agency said, citing Li’s comments on the sidelines of China’s annual session of Parliament.
The horizontal trend points to long-term steady development, but does not eliminate the possibility of short-term fluctuations, or mean the economic transformation is complete, Li said.
“Our economy still has many difficulties to resolve, so we must prepare to respond to the emergence of possibly relatively large risks,” Li said.
Earlier on Sunday, a vice chairman of the state economic planner said China’s industrial output grew more than 6 percent in January and February, and that the survey-based unemployment rate in 31 major cities was about 5 percent for the two months.
Ning Jizhe, vice chairman of the National Development and Reform Commission (NDRC), gave the approximations, which were in line with expectations for official data set to be issued on Tuesday.
Fixed asset investment growth kept pace with the final few months of last year, Ning said.
“China’s economic growth still mainly relies on domestic demand,” he said.
Faked data
Ning also said anyone caught falsifying economic data would face zero tolerance and be punished under the law.
There has long been skepticism about the reliability of Chinese data, especially as the government has sought to reduce expectations of a protracted slowdown in the world’s second-largest economy.
In January, the “rustbelt” northeastern province of Liaoning said in its annual work report it had falsified reporting of fiscal data from 2011 to 2014.
“As soon as there are statistical cases that break the law or faked, it will be voted down, there will be zero tolerance, no appeasement,” said Ning.
The combined economic output of China’s provinces has long exceeded national output measured by the National Bureau of Statistics (NBS), raising suspicions that local officials were overstating performance.
The gap has been narrowing, but the discrepancy between provincial gross domestic product (GDP) and the national figure was still 2.76 trillion yuan ($399.71 billion) last year, roughly equal to the GDP of Thailand, according to a Reuters calculation.

Source: Arab News