Economist predicts slower but stable growth in China

China's economic growth is expected to slow down to an average annual rate of 7 to 7.5 percent, an economist said Saturday at a national conference on urban planning in Haikou, capital of south China's Hainan Province.
Despite the slowdown, China is poised to replace the United States as the world's largest economy in a decade, said Yao Yang, director of the China Center for Economic Research (CCER) at Peking University.
Hit by the global financial crisis, China has reported a major export decline, which has come as a major blow to the country's manufacturing sector, said Yao.
Last year, the service sector outperformed the manufacturing sector for the first time in terms of contribution to China's GDP.
Meanwhile, a decline in the working population beginning in 2012, a result of the low birth rate in the last two decades, also threatens to slow down China's economy, said Yao.
"Some say China's growth rate may slow down to 6 to 7 percent, but I think that's far too pessimistic," he said. "The decline of the working population can be offset by prolonged service and improved efficiency."
He said the new workforce tends to be twice as efficient as retirees, given their vitality and better educational backgrounds.
"The situation will be even better, as an estimated 40 percent of new workers will have received a college education by 2020, compared with the current 32 percent."
Meanwhile, Yao suggested China should raise its retirement age gradually to keep its working population from dropping too fast.
China's retirement age is 60 for men, 55 for female white-collar workers, and 50 for female blue-collar employees.
The working-age population dropped 2.44 million to 919.54 million in 2013, the second straight year of decline.