China set to steer clear of significant slowdown in new era

The Chinese economy will be able to steer clear of rapid declines in GDP growth during the new development era, a prominent economist has said, while ruling out the possibility of an immediate rebound.

“After getting rid of the downward trend, the growth will level out in the future, rather than accelerating quickly,” said Liu Yuanchun, vice president of Renmin University of China, when addressing a forum.

The economy showed strong resilience in the first three quarters as reforms created fresh momentum, with GDP growing by 6.9 percent year-on-year. Services and consumption played a greater role in driving growth, and high-end manufacturing and the IT sector saw strong performance.

Liu said he expects the country’s economic restructuring will continue to generate tangible results, with structural improvements in both external and internal demand.

His remarks came after a report to the 19th National Congress of the Communist Party of China said the economy is in “the new era, a pivotal period for transforming the growth model, improving economic structure, and fostering new drivers of growth.” China has been transitioning from a phase of rapid growth to a stage of high-quality development, according to the report.

Liu said that risks in the economy would be eased in the new era but close attention should still be paid to them.

“The downward cycle in the financial sector will likely be more complicated than predicted, which will lead to a very different deleveraging process compared with the European and US markets,” Liu said. “It is not the time to sound the all clear yet.”