Business / Economy

Calling China's slower growth 'catastrophe' is exaggeration: German FinMin

(Xinhua) Updated: 2016-01-23 14:31

BERLIN - German Finance Minister Wolfgang Schaeuble said it was important to recognize real signs of crisis, and calling China's slowdown "catastrophe" was an "exaggeration," according to an interview published on Friday.

"On China, it was always said that two-digit growth rates were dangerous. Now the country has a growth of 6.9 percent, then suddenly it was supposed of being a catastrophe for the world economy," said Schaeuble in an interview with Spiegel Online.

"Fiscal policy must be careful so that they do not promote such exaggerations," he added.

China's gross domestic product (GDP) increased by 6.9 percent in 2015, the slowest annual expansion in 25 years, but in line with the government's target. Sluggish global economy and China's economic transition were among factors behind the deceleration.

China is under a structure reform in a bid to shift its economic driving forces from exports and investment to consumption. The country launched a "supply-side" reform last year, aiming at reducing noneffective and low-end supply, improving products and service quality and boosting productivity by innovation.

"The general direction of the reforms is right. In a longer term of about five years, China's economic transition will succeed, providing that the government has the determination to continue the reforms," Kevin Rudd, former Australian prime minister, told Xinhua in Davos, Switzerland when attending the World Economic Forum.

"We see the transitions as manageable," Christine Lagarde, Managing Director of the International Monetary Fund (IMF), said at the forum, stressing calm in the face of recent volatility.

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