Chinese leadership confident in economy despite slowdown in growth

By Yu Siluan Source:Global Times Published: 2015-3-5 17:58:01

China's slackened pace of GDP growth over recent years has stirred world-wide concern about the health of the country's economy. Official data released in late February showed China's GDP expanding by 7.4 percent in 2014. Although this rate met the government's target for that year, it was nevertheless the slowest rate of expansion in over two decades.

Chinese Premier Li Keqiang released this year's growth target in a government work report made during the opening meeting of the third session of China's 12th National People's Congress (NPC) in Beijing on March 5. Analysts believe that policymakers have sufficient confidence in the economy and are unconcerned about fluctuations in GDP growth over the short term.

Analysts say that consumption will play an increasingly important role in fueling growth amid the weakening investment and export environment. A compelling example here is the fact that turnover reached 35 billion yuan ($5.6 billion) during last year's Singles' Day, a day when online commerce companies roll out heavy discounts to drum up sales. The latest statistics show that consumer expenditures accounted for 51.2 percent of China's GDP growth in 2014, 3 percentage points more than that in 2013.

The trading volume recorded on last year's Singles' Day reflects the huge consumptive potential of China. Actually, the Chinese government has been pushing vigorously to increase the economic role of domestic demand and consumption while at the same time reducing long-standing dependences on investment and exports.

An active e-commerce market has promoted a boom in relevant services. To name just one example, more than 15,000 young people from all over the country are working in Qingyanliu village, Yiwu, Zhejiang Province. They are reportedly operating more than 2,800 online shops and about 30 courier companies. The current situation in Qingyanliu village represents a new source of vitality in China's economy.

China has entered a "new normal," a phase during which its economy will develop at a more moderate pace. At this stage, the Chinese government is paying more attention to the quality of economic growth than sheer speed as it devotes itself to optimizing its economic structure and improving people's livelihoods.

In fact, China's economic structure is orienting toward a healthy position. Statistics show the services sector accounting for a growing share of overall GDP, reaching 48.2 percent in 2014. In the meanwhile, China's Gini coefficient - a measure of inequality - went down in 2014. The high- and new-technology industries witnessed double-digit growth in 2014, outpacing the sector average.

Employment and residents' income have also been rising despite decelerating economic growth. Statistics show that 13.22 million new urban jobs were created last year. And the disposable income of the average Chinese citizen grew by 10.1 percent.

The Chinese government views 2015 as a key year in which China will deepen its reforms in a comprehensive manner and further invigorate the market.

Ma Jiantang, the commissioner of the National Bureau of Statistics, indicated that China will adapt to the "new normal" and keep its economic growth rate in a reasonable range. He also said the risks to China's economy are still controllable despite recent signs of decline.

An economist close to Chinese government decision-making said that China still has one of the fastest rates of GDP growth in the world despite its present slowdown. He also stressed that fluctuations in economic growth are acceptable as long as there is still full employment, stable commodities prices and steady income growth.

The author is a reporter with People's Daily.

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