GDP rises at estimated 7% in 2015

By Xie Jun Source:Global Times Published: 2016-1-13 0:38:01

2016 GDP growth projected at slower rate: economists

China's Gross Domestic Product (GDP) grew by an estimated 7 percent in 2015, roughly in line with government targets, China's top economic planning agency said on Tuesday, but warned that 2016 will be a difficult year for the country's economy.

A total of 13 million new jobs were added, and major economic targets were achieved with the launch of a number of government measures, Li Pumin, secretary-general of the National Development and Reform Commission (NDRC), said at a press conference on Tuesday.

Li's comments come at a time when turbulent Chinese stock markets and a sharp decline in the yuan's exchange rate have sparked concerns over a potential "hard landing."

The 7 percent GDP growth, though down from the 7.3 growth in 2014, is slightly higher than estimates of some international financial institutions, such as 6.8 percent by Goldman Sachs and Moody's, and 6.9 percent by Standard & Poor's.

Lian Ping, chief economist of the Bank of Communications, told the Global Times on Tuesday that it's highly probable that China's GDP will be around 7 percent for 2015.

Lian said the fourth quarter GDP is likely to reach 7 percent, as economic data released so far shows that exports, infrastructure investment and consumption have all rebounded.

GDP growth in the first three quarters was 7, 7 and 6.9 percent, respectively.

Difficult 2016

Li said China approved 280 fixed asset investment projects worth 2.52 trillion yuan ($383 billion) in 2015, with 32 projects worth 515.1 billion yuan approved in December alone.

However, he noted that for 2016, the global economic situation will worsen, and the negative effects of China's economy as well as the "long-accumulated problems" might manifest itself to a greater extent this year.

Wang Tao, chief China economist at UBS Securities, also said that 2016 will be a "difficult year" in terms of economic development, and GDP growth will slow down further to 6.2 percent for the whole year.

That's because the process of solving the oversupply in the real estate sector will continue in 2016, Wang said at the UBS press conference in Shanghai on Tuesday.

'Stable' yuan

Recent fluctuations in the yuan's exchange rate have also heightened concerns over a rapid slowdown in China's economy,  according to overseas media.

The central parity rate of the yuan weakened by 2 basis points to 6.5628 against the US dollar on Tuesday.

But Wang told the Global Times on Tuesday that while weaker against the US dollar, the yuan has been doing fairly well against other currencies.

Therefore, recent currency moves have been "more about dollar strength than yuan weakness," she noted, stressing that currency fluctuations are normal.

The government may also roll out more fiscal and monetary policy adjustments to boost growth in 2016. These measures include two interest rates cuts, several cuts in the bank's reserve requirement, releasing its grip on enterprise bond issuance and increasing infrastructure projects, Wang said.

Xu Hongcai, director of the department of information of the China Center for International Economic Exchanges, predicted economic growth will continue to slide in 2016.

"A 6.8 percent growth is out of question," he told the Global Times on Tuesday.

Lian said that it's very hard to predict the exact GDP growth in 2016 because of too many uncertainties in the world economy, the pace of changes in US monetary policy, as well as activity in China's real estate market. 

"If demand in the real estate market rises in 2016, GDP growth might approach or even hit 7 percent. If not, a growth above 6.5 percent is to be expected," Lian said.

Posted in: Economy

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