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Growth rate should not take center stage in Chinese economy

By Luo Lan (People's Daily Overseas Edition)

10:00, April 29, 2012

Edited and translated by People's Daily Online

The growth rate of Chinese economy has been declining for five consecutive quarters. People are not only worry about this but also expect that the macro-economy can bottom out as soon as possible. Therefore, the discussion that when the Chinese economy will bottom out is getting hotter and hotter.

In particular, the discussion is further pushed to a new high after the Chinese Academy of Social Sciences recently released the report to lower the growth rate of GDP in 2012.

In this regard, experts pointed out that the focus of Chinese economy is not the "bottom out" and speed but how to seize the opportunity to prepare for adjustment of economic structure and improvement of economic quality.

Heated discussion

The Spring Report 2012 on China's Economic Prospects released by the Chinese Academy of Social Sciences on April 25 shows that the growth rate of Chinese economy will further decline in 2012. It is expected that the growth rate of GDP will be about 8.7 percent, a drop of 0.5 percentage points from 2011.

Then, people began predicting when the Chinese economy will bottom out.

Some analysts said that since the growth rate of industrial value added rebounded in March and the official Purchasing Managers' Index (PMI) also rebounded significantly, China's economy has bottomed out and it will begin to rise in the second quarter in 2012.

However, other analysts did not think so. Wang Jian, expert of China Society of Macroeconomics, said that the rebound of industrial value added growth rate can only show that the trend of economic downturn is straight but not folded. As long as there is no large adjustment and reform and the contradiction of overproduction is not resolved fundamentally, the trend of economic downturn will continue into 2013.

Some people said that China's economy will rebound in the third quarter. Zhang Zhiwei, chief economist of Nomura Securities, said that the 8.9 percent in the fourth quarter in 2011 and 8.1 percent in the first quarter in 2012 made the macro economist generally predict that China's economy has bottomed out and it will rebound in the third quarter in 2012. They believed that the factors supporting the rebound include the improvement of mobility, restoration of export environment and reverse of some industries.

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