Business / Economy

No need for panic about China's economy

(Xinhua) Updated: 2016-02-23 14:07

BEIJING - Despite slower growth and market volatility, China has plenty of good news to offer.

Skyscanner, a global travel search site headquartered in the United Kingdom, is a case in point to question the fears about China.

The company announced last week it saw a 67-percent jump in Chinese visitors to the site in 2015, helping boost its revenue by 28 percent to $183 million.

"We have to understand China better," Shane Corstorphine, chief financial officer of Skyscanner, said in an interview with CNBC on Friday, calling increasing outbound travel from China "a major opportunity."

Concerns over China are natural, given the country's economy is in its most protracted downshift since the late 1970s, which has been accompanied by recent stock market fluctuations and a weakening currency.

However, a broader long-term perspective will help companies such as Skyscanner make more sensible strategies for China.

The sources of pressure are undeniable: soft property investment, bloated industries and slumping trade. But sound fundamentals justify a positive outlook for China's future growth.

That judgment led US computer chip giant Intel to invest $5.5 billion in its plant in northeast China's Dalian city last October to produce the company's most advanced memory chips.

Intel cares more about China's market demand five to 10 years from now than its GDP growth for one year, said Richard Howarth, vice president of Intel's Technology and Manufacturing Group and general manager of Intel Semiconductor (Dalian) Ltd.

For the moment, even though China recorded its slowest expansion in 25 years in 2015, employment and consumption remain resilient.

The registered unemployment rate in China's cities was 4.05 percent at the end of 2015, better than official targets. Consumption contributed 66.4 percent to economic growth, up 15.4 percentage points from 2014.

China also has enough ammunition to stop further deceleration, with the world's largest foreign exchange reserves, a huge trade surplus, room for monetary and fiscal maneuvering, and a certain degree of capital control.

Those conditions make the possibility of a crisis in China much smaller than in other economies, economist Marie Owens Thomsen of the French bank Credit Agricole wrote on the Chinese website of the South China Morning Post during the weekend.

Chinese vice finance minister Zhu Guangyao asserted on Saturday that China's economy "will surely continue to grow."

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