China breathe more easily on economy

THE risk of a steep slide in China’s economy has reduced, the head of a government research center said this month, adding the country had moved through an “L-shaped” pattern of slowing to “horizontal” growth.

China’s economy grew 6.7 percent last year, according to the government, the slowest pace in 26 years.

But as the government moves to cool the housing market, slow new credit and tighten its purse strings, China will have to depend more on domestic consumption and private investment.

The government this month trimmed its economic growth target to about 6.5 percent for this year.

Li Wei, the director of the Development Research Center of the State Council, China’s Cabinet, said many positive economic signs were emerging domestically and internationally, and the risk of a large slide in economic growth had “clearly lowered.”

China’s economic development had gone from a “downward stroke in the L-shape to the horizontal stroke,” Xinhua news agency said, citing Li’s comments on the sidelines of China’s annual session of parliament.

The horizontal trend points to long-term steady development, but did not eliminate the possibility of short-term fluctuations, or mean that the nation’s economic transformation was complete, Li said.

“Our economy still has many difficulties to resolve, so we must prepare to respond to the emergence of possibly relatively large risks,” Li said.

Earlier this month, a vice chairman of the state economic planner said China’s industrial output had grown more than 6 percent in January and February, and that the survey-based unemployment rate in 31 major cities was about 5 percent for the two months.

Ning Jizhe, vice chairman of the National Development and Reform Commission, gave the approximations, which were in line with expectations for official data set to be issued tomorrow.

Fixed asset investment growth had kept pace with the final few months of last year, Ning said.

“China’s economic growth still mainly relies on domestic demand,” he said.

China posted its first trade gap in three years in February as a construction boom pushed imports much higher than expected. That upbeat import reading reinforced the growing view that economic activity in China picked up in the first two months of the year.