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Moderate growth rate (3)

By Tang Min  (China Daily)

13:43, August 23, 2012

No matter how one looks at the situation, then, it's nearly impossible to expect economic growth to proceed at an extremely fast pace this year.

As long as the country's growth rate for the second half of the year is above 8 percent, we can guarantee that GDP growth will likewise proceed at a rate of 8 percent for all of 2012. In 2011, China's total GDP was 46 trillion yuan ($7.24 trillion). Starting from that base, we need to only increase our economic growth rate by 0.5 percentage point, or 120 billion yuan, to achieve that target of 8 percent. If monetary policy could be loosened a bit to encourage investment in fixed assets, such an increase would not be difficult to obtain. There is thus no reason to adopt policies that will intervene greatly in the economy.

Some people still hope China will drive world economic growth. These same people are also often the ones who make a fuss whenever the slightest signs of an economic slowdown appear in China, often seeing them as portending a "hard landing". Yet, they seem to have no clear understanding of what a hard landing is. Is it negative growth, zero growth or growth at a rate of 4 percent? People with the least amount of common sense know that a hard landing in China is very unlikely at this time. If they contend that a growth rate of 7 percent portends a hard landing, they will be uttering one of the most absurd things I've ever heard.

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