ADB tips China growth for 2014 at 7.5%
Print Edition
CHINA’S economic growth is expected to moderate to 7.5 percent this year as investment slows and structural reforms are actively pushed through, the Asian Development Bank said yesterday.
Such a pace, though decelerating, remained robust after the country’s gross domestic product expanded 7.7 percent in 2013, the bank said in its flagship annual publication, Asian Development Outlook.
Zhuang Juzhong, ADB’s deputy chief economist, said China has the potential to improve growth quality, making it more inclusive and more sustainable. “China is tightening credit growth and working to bring local government debt under control. At the same time, the country has embarked on an ambitious reform agenda that will impact key areas of the economy,” Zhuang said.
“Such changes may result in slower growth before it stabilizes or rises again.”
China’s growth has shown signs of moderation since the start of this year, with indicators, including industrial production, fixed-asset investment and retail sales, all pointing to the soft side.
Data showed that industrial production growth moderated to 8.6 percent in the first two months, a five-year low which was down from 9.7 percent in December. Fixed-asset investment increased 17.9 percent during the period, the slowest since 2002, while retail sales growth softened to 11.8 percent, the weakest since 2005.
China has kept its economic growth target unchanged at about 7.5 percent for this year, but much has changed amid deepening reforms and wars being waged against both poverty and pollution.
Managing decelerating investment growth in a controlled manner will be a key challenge for China’s policy-makers, according to the publication.
“The People’s Bank of China needs to find the right balance between subduing credit growth and supporting economic growth,” it said. “Rapid slowing of credit growth could place more stress on enterprises and financial institutions, eroding investor confidence.”
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