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People's Daily Online>>China Business

Sharp decline in economic growth unlikely

By Zhou Xiaoyuan (People's Daily Overseas Edition)

08:53, December 23, 2011

Edited and translated by People's Daily Online

Recently, JP Morgan, Nomura Securities (Asia) and other agencies have shown concerns about major downside risks China's economy may face in 2012 in their recent forecasts.

Growth is not a problem; downturn will not be severe

"External factors are not controllable, but the policy factors are controllable," said Zhang Xiaojing, director of macroeconomic research office of CASS Institute.

He said that next year the central government will take proactive fiscal policies and slightly loose monetary policies on the basis of prudence, to ensure stable and rapid economic growth. In addition, investments in all parts of the country are still showing a good trend at present.

The central government can play a greater role in financial investment to compensate for uneven financial distribution among various regions. Undoubtedly, China’s economy will continue to grow, and even if there will be an economic downturn, it will not be severe.

Too much concern about slower growth is unnecessary

"It is possible that next year's economic growth will be slower than this year, but we need not be too concerned about it," said Lu Zhongyuan, deputy director of the Development Research Center of the State Council. Lu said despite the slowdown, the Troika structure of investment, consumption, and exports may tend to become more rational, and coordination of economic growth will also be enhanced.

Lu added, "Usually, the economic growth slowdown provides the best opportunity for ‘survival of the fittest’, to accelerate the restructuring by the market mechanism."

He said the world economic growth will continue to polarize next year; uncertainty and instability factors will also increase. Domestically, oil and electricity shortage also highlights the urgency for related reforms.

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