Business / Economy

Good outlook for Chinese economy in longer term: expert

(Xinhua) Updated: 2015-06-27 13:14

OSLO - China is currently experiencing a slowdown in growth while the longer-term outlook of the world's second-largest economy is good, Marc Lanteigne, a China expert, told Xinhua in a recent interview.

"In the short term there are going to be some bumps. I believe that the best outcome or the most likely outcome would be a soft landing," said Lanteigne, a senior research fellow at the Norwegian Institute of International Affairs.

"In the longer term, I think China's outlook is looking quite good," he said. "We are seeing China begins to internationalize its economy. China's economic power starts to grow in many parts of the world."

The expert said as global demand for goods is still falling in general, the slowdown of China, a very strong manufacturer, is "basically inevitable."

"The question here is whether it would be a kind of controlled slowdown like it slows down very gradually and does not cause a lot of damage. Or would it be a little bit more rough, such as what happened in Europe," Lanteigne said.

"So far it looks like the first option. So far it looks like things are slowing down and there is concern about areas of the Chinese economy, but so far it appears to be a kind of soft landing," he said.

China had a long period of very high-rate growth and now the country is facing a completely new method of growth and new set of economic challenges, he added.

As growth is slowing down, the new normal is a reality in China, Lanteigne noted, referring to the concept proposed by the Chinese government to describe a period of more moderate but balanced economic growth.

He said Beijing is making efforts to avoid major shocks to the stock market and property prices and also placing emphasis on addressing urgent issues that might greatly affect the Chinese economy, such as poverty, income inequality and pollution.

"There are going be a lot of heavy obstacles but I really believe the Chinese economy will get through them quite well," Lanteigne said.

In the meantime, as China has become the world's second-largest economy, it is under a lot more stress to maintain not only its domestic economy, but also its role in international economy, the expert said.

It used to be that the main drivers of global economy were the United States and Europe and now China has also become an important driving force for world economy and will continue to play the role, Lanteigne said.

Even though China has begun to pivot its growth strategy to focus more on domestic consumption, the country is also making efforts to enhance its foreign trade, which is manifested in its Belt and Road Initiative, he said.

The Belt and Road Initiative, which refers to the Silk Road Economic Belt and the 21st-Century Maritime Silk Road, is a development framework proposed by Chinese President Xi Jinping in 2013 to bring together countries in Asia, Europe and even Africa via overland and maritime networks.

Lanteigne said the Belt and Road Initiative is very welcome and is looked at very seriously in Europe as it is going through "five years of very serious economic trauma."

"There is the idea that Europe needs to increase its trade with China as well as some other big countries, such as India, as natural partners," he said. "There is the idea that the United States would not necessarily be the only partner any more."

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