The seven-percent year-on-year growth of Chinese economy during the first half of 2015 should be considered medium-high growth, and China will remain a top contributor to global economy, a recognized economist said Tuesday.
"Domestically, seven-percent growth has not been the lowest growth level in more than 35 years of reform and opening up in China. We should see it as medium-high growth," said Chen Dongqi, an economist and vice president of the Academy of Macroeconomic Research of the National Development and Reform Commission (NDRC), whose policy suggestions, including "fine-tuning" and "making progress while ensuring stability," have been adopted by the government.
He said the seven-percent growth was the result of both cyclical and structural readjustment in the Chinese economy. It still beat the growth rates of less than four percent recorded in 1989 and 1990, two years of cyclical economic readjustment.
Adjusted for inflation, the size of the Chinese economy was almost 60 times larger than it was 15 years ago. "One-percent growth now is much more significant and difficult than that in the past. We would not say China's seven-percent growth now is low growth," he said.
"Internationally, China's seven-percent GDP growth slightly underperforms compared to that of India, whose GDP is around one fifth of China's, and it still beats the growth of any other major economies," he said.
China's economic growth this year will be 3.2 times that of developed economies, 2.7 times that of the United States, 8.5 times that of Japan, 4.5 times the growth of the euro zone, and 1.6 times that of other emerging markets and developing nations, the economist said, citing the International Monetary Fund forecasts in April.
"If we forecast China's annual GDP growth to reach seven percent this year, based on this growth, China will remain a top contributor to global economic growth," he said.
He said the seven-percent GDP growth registered in the first half can be sustained because China's reform and opening up, innovation, mass entrepreneurship, economic upgrades and macroeconomic policies will continue to invigorate growth.
China's reform in taxes, finance, prices, exchange rate, state-owned companies and social security, as well as efforts to break monopolies, remove regional barriers and promote fair market access, will boost market vitality. Meanwhile, its opening-up policies in business and the capital market, as well as its promotion of the Belt and Road Initiative, international industrial cooperation and RMB globalization, also underpin growth, the economist said.
He added that Chinese authorities still have plentiful policy tools to prop up growth, as the low national debt level allows expansion of investment through bond issuance, and low inflation offers space for monetary easing.
Since the start of the year, policies including three rounds of cuts to both interest rates and banks' reserve requirement ratios, structural tax reductions, accelerated fiscal spending on infrastructure and reduced down payment requirements for home buyers have been rolled out to boost growth, with the second quarter reporting stronger-than-expected results.
