Int’l or­ga­ni­za­tions note sta­ble growth

China Daily (Hong Kong) - - TOP NEWS - By XIN­HUA

The Asian Devel­op­ment Bank up­dated its 2016 eco­nomic out­look this week, re­tain­ing its 6.6 per­cent growth fore­cast for the Chi­nese econ­omy in 2016 and 6.4 per­cent for 2017, while down­grad­ing its pro­jec­tion for the whole of de­vel­op­ing Asia.

China’s eco­nomic ex­pan­sion is “driven by strong do­mes­tic con­sump­tion, solid wage growth, ur­ban job cre­ation and pub­lic in­fra­struc­ture in­vest­ment,” the ADB said in a state­ment.

In­ter­net busi­nesses, new en­ergy and ro­bot­ics rep­re­sent growth po­ten­tial for the Chi­nese econ­omy, said Zhuang Juzhong, ADB deputy chief econ­o­mist.

The ADB is not alone in its up­beat fore­cast. The World Bank pre­dicts 6.7-per­cent growth for 2016 and 6.5-per­cent for 2017.

“We are very con­sis­tent with our fore­cast sys­tem. We still be­lieve a hard land­ing is not likely,” said Bert Hof­man, World Bank coun­try di­rec­tor for China, Korea and Mon­go­lia.

The econ­omy is dy­namic and do­ing very well, said Hof­man, add- ing that China’s an­nual growth tar­get of above 6.5 per­cent for 2016-20 is achiev­able with suf­fi­cient re­forms and good mi­cro-poli­cies.

“Ad­just­ing your pol­icy in light of new facts (and) cir­cum­stances is wise, and China has been do­ing well on that,” he said.

China has ac­com­plished much in key ar­eas, in­clud­ing lib­er­al­iz­ing and open­ing the econ­omy, and the fi­nan­cial sys­tem re­form, said David Lip­ton, first deputy man­ag­ing di­rec­tor of the In­ter­na­tional Mone­tary Fund.

Amid wan­ing for­eign trade, re­bal­anc­ing en­tails tran­si­tion­ing to a do­mes­tic-con­sump­tion ori­ented econ­omy, Lip­ton said.

“We have al­ready seen the ser­vice sec­tor grow­ing more rapidly than the in­dus­trial sec­tor. That’s an in­di­ca­tion of these changes,” he said.

China has at­tained steady growth this year, with GDP ex­pand­ing by 6.7 per­cent year-on-year in the first three quar­ters.

How­ever, the three eco­nomic ex­perts noted that given the fal­ter­ing global re­cov­ery, US in­ter­est rate hikes and in­creas­ing pro­tec­tion­ism and na­tion­al­ism, China’s ex­ter­nal en­vi­ron­ment re­mains un­cer­tain.

“We face in­creas­ing un­cer­tainty, so we have to pre­pare for that,” said Hof­man.

Lip­ton said that cen­tral and lo­cal government debt is ris­ing in China and cor­po­rate debt is very high.

The IMF of­fi­cial sug­gested a huge over­haul of un­prof­itable sta­te­owned en­ter­prises and re­duced pro­duc­tion of goods with ex­cess sup­ply in the global econ­omy.

“It is right for China to fo­cus on the sup­ply side of the econ­omy, boost­ing pro­duc­tiv­ity and ef­fi­ciency of work­ers, and pro­vid­ing work­ers with bet­ter equip­ment and tech­nol­ogy,” Lip­ton said.

Zhuang voiced con­cern about cor­po­rate debt, but he said the risks were gen­er­ally un­der con­trol as the cen­tral government has al­ready be­gun to ad­dress it.

is the fore­cast for China’s eco­nomic growth in 2017 made by the Asian Devel­op­ment Bank.

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