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'Hard landing' unlikely for Chinese economy

(The Economic Daily)

15:44, May 25, 2012

Edited and translated by People's Daily Online

Recent reports from several media groups called the latest macroeconomic data of April published by the National Bureau of Statistics of China "disappointing", which again aroused heated discussion about whether Chinese economy will have a "hard landing". How to think of China's current macroeconomic situation?

Economic fundamentals decide the economic situation of an economic entity, namely economic growth rate, inflation rate, employment rate and balance of international payments. Currently, Chinese economy maintains a slow but stable growth rate; the inflation rate is decreasing steadily; the employment situation remains stable and the balance of international payments basically is favorable. Therefore, Chinese economy will not encounter a "hard landing".

A slow but stable growth rate

The growth rate of Chinese GDP has dropped for five consecutive quarters. The GDP increased by less than 10 percent year-on-year in the first quarter in 2011 and about 8 percent year-on-year in the first quarter in 2012.

According to Sheng Laiyun, spokesman of the National Bureau of Statistics of China, the growth rate of 8 percent obviously is higher than that of the advanced countries and the major emerging economic entities.

"China's expected goal of national economic development during the '12th Five-Year Plan' is 7 percent in 2011 and in 2012 the expected goal is 7.5 percent. Therefore, the growth rate of 8 percent is not low and is in line with China's expected macro-control," said Zhu Baoliang, chief economist and director of the Economic Forecast Department under the State Information Center.

Inflation rate decreasing steadily

In July 2011, China's inflation rate reached the highest point of this time, with CPI reaching up to 6.5 percent. Fortunately, under a series of policies and measures of the Party Central Committee and the State Council, the price regulation and control has taken effect. The inflation rate has dropped for five consecutive months by December.

The consumer price will somewhat fluctuate every month in 2012 but it has been remaining an overall falling trend since August 2011. The average CPI between January and April in 2012 has increased by 3.7 percent from the same period in 2011, lower than 4 percent of the expected goal at the beginning of 2012.

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Observer at 2012-05-25203.177.74.*
Keep saying that there will be no hard landing instead of preparing for it and you will fell how hard it can be...

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