Business / Economy

Senior economist backs moderate growth

(Xinhua) Updated: 2015-08-07 09:23

BEIJING - The Chinese economy will resist looming downward pressure to maintain growth of around 7 percent in future thanks to emerging favorable conditions, a prominent economist said on Thursday.

Already 30 percentage points below its peak, the growth will maintain its current level in the next period if nationwide reform and encouragement of innovation is successful, Wang Yiming, deputy director of the Development Research Center of the State Council, told Xinhua.

Wang cited five factors that will drive economic engines to hold steady.

China has a sound economic foundation with the world's most complete industrial system and the largest mobile network, said Wang, who believes the economy will gather new impetus as its industrialization and urbanization are far from finished.

Chinese enterprises will grab new opportunities during the next round of global economic adjustment, he said.

Secondly, Wang said, consumption will play a more significant role, as it already contributed 60 percent to the economic increase in the first half, up 5.7 percentage points compared to the same period last year.

Enormous investment is needed in areas including poverty reduction, environmental protection, water conservation and urban renovation, he added.

Thirdly, China's innovation push will improve technology, business management and the commercial model so that it makes better use of capital and maintains growths in total factor productivity, according to the economist.

He also noted the integration of technology such as cloud computing, robots and new materials with traditional industries, and the country's rising central and western regions as the last two bright spots.

Weighed on by global depression and domestic restructuring, the world's second-largest economy has been tumbling since the global financial crisis. The outlook brightened after official data showed the economy grew briskly by 7 percent in the second quarter of 2015.

"Given international experience, what we are seeing is just natural adjustment when the economy moves into a more sophisticated phase, which is in line with the model of development for a country trying to catch up with lead runners," Wang said.

Although the growth rate has slipped, the economy has been reorganized into a better structure, as indicated by the falling proportion of agriculture and a services sector that outweighs manufacturing.

Wang pointed out that domestic consumption has reversed its losing trend and the excessive reliance on investment and export has also eased.

Nevertheless, he said the government should be proactive in preparing for change as economic transformation will not complete itself.

He advised policymakers to perfect macro regulation by improving fiscal and monetary policies and setting up a risk warning regime to prevent economic volatility. The government should back reforms to create growth momentum and stimulate innovation and entrepreneurship for high-tech industries.

Hot Topics

Editor's Picks