China's economy slows to restore endurance (2)

13:30, July 15, 2011      

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Endogenous growth power remains strong

"Judging from the current and future situation, China's economic growth remains relatively strong, and the risk of rapid decline in economic growth is relatively small," Sheng said, when answering questions of reporters.

Sheng said that first, in regard to investments, as 2011 is the beginning of the 12th Five-Year Plan, the investment enthusiasm in various areas is relatively high. The local investment growth rate stood at more than 28 percent, which is a relatively high figure. The growth rate of private investments stood at nearly 34 percent in the first half of 2011, which is significantly higher than the average growth rate of national fixed assets, indicating that the market investment growth is relatively fast.

Furthermore, the income of urban and rural residents continued to increase in the first half of 2011, which will also increase the consumption strength of residents. Meanwhile, the social security and consumption environment continues to improve, which will also promote consumption.

Although China's export growth rate dropped by a relatively wide margin, the 20 percent export growth rate is still not a low figure because the base number of 2010 was relatively high and China's trade surplus reached 44.9 billion yuan in the first half of 2011. Therefore, China's exports continue to increase steadily. As China is in the acceleration phase of industrialization and urbanization, the power and growth space of the troika are still relatively large. In addition, structural adjustments and the transformation of development patterns in various places, including the acceleration of the pace of industrial upgrading, will also continue to give new vitality and driving force to the economic growth.

"Economic structural adjustments will bring greater space to allow China's economy to get on a healthier development track. The Chinese government should implement certain preferential policies to cultivate strategic emerging industries in order to stimulate business innovation. Some state-owned monopoly-type fields should also be further opened to private capital," Guo said.

Lian predicts that China's economy will further slightly decline in the second half of 2011. "In the second half of 2011, China's investment will not obviously slow down because the affordable housing construction will be further accelerated, and the level of consumption will slightly increase. In the first half of 2011, the rigid demand of the automotive industry and real estate was restricted by the macroscopic readjustment and control, which will be released if housing and car prices show slight decline in the second half of 2011," Lian said.

He also predicts that China's GDP growth will reach nearly 10 percent in 2011.

By Ye Xiaonan from People's Daily Overseas Edition, translated by People's Daily Online.
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