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China likely to grow at medium-to-high pace under 'new normal'

By Wang Jingjing (chinadaily.com.cn)

Updated: 2015-03-03 08:55:40

China likely to grow at medium-to-high pace under 'new normal'

A Chinese worker assembles a new energy car on the assembly line at an auto plant in Zouping county, East China's Shandong province, Dec 16, 2014. [Photo / IC]

China's economy is likely to grow at a medium-to-high rate under the "new normal", Economic Daily reported, citing Justin Yifu Lin, a member of China's 12th CPPCC, on Monday.

Under the "new normal", China has both the conditions and the ability to grow its economy to a medium-to-high level while maintaining a medium-to-high growth rate in the long term, according to Lin in an interview by the newspaper.

Lin is a member of the Standing Committee of the 12th National Committee of the Chinese People's Political Consultative Conference (CPPCC) that will meet on Tuesday. He is also the former World Bank chief economist and a professor at Peking University.

The world's economic cycle was a very important contributing factor to the recent slowdown of the Chinese economy, as data showed that the world's economic growth last year was weaker than the World Bank's forecast, said Lin.

Though China's growth rate was slower, it was still the highest among the world's major economies, Lin said.

He believed that the drive of economic growth lay in the continuing growth of labor's productivity, which ultimately depends on investment, which needs to be efficient. China is undergoing continual urbanization, which means it needs more investment into infrastructure and public projects, such as rail and road construction and pollution control, said Lin.

The new normal will be the "main logic" for economic growth for some time, said a statement released after the Central Economic Work Conference that concluded on Dec 11, 2014. And it also said that China's economy has entered a period of medium-to-high growth, transitioning from high growth.

Lin said that the Conference has elaborated on the characteristics of the "new normal", including the changing of consumption models, new sectors of investment and the transformation of low cost comparative advantages for export.

China's gross domestic product (GDP) growth rate stood at 7.4 percent last year, the weakest in 24 years.

China's "new normal" means a slower growth rate but higher quality, and China will strive to keep economic growth and policies steady in 2015 and adapt to the "new normal", said a statement released after the Central Economic Work Conference concluded on Dec 11, 2014.

Related reading

China may further lower growth target for 2015, by Xinhua

China may further lower its economic growth target for 2015 during the upcoming legislative session, foreign and domestic experts predict.

The annual meeting of the National People's Congress, China's top legislature, starts this week alongside the meeting of the National Committee of the Chinese People's Political Consultative Conference, the top political advisory body.

As in previous years, China's premier is expected to deliver a government work report that will set the annual growth target.

Last year's target was "around 7.5 percent", but the economy narrowly missed it after registering a 24-year low of 7.4 percent year on year.

The last time China lowered its growth target was in 2012, when the target of 8 percent, which had been the same for 7 years, was cut by half a percentage point.

Economic indicators for the beginning of 2015 are disappointing, in January factory activity slumped below the boom-bust line for the first time in more than two years, consumer prices dropped to 5 year low and trade sank below expectations, fueling anxiety and feeding speculation about whether the government will lower its growth target.

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