|Jenia Cane |||Feb 22, 2017 10:46 PM EST|
(Photo : Flickr/tonynetone) China’s Economy Seen to Stabilize, Gain Momentum
China's economy is expected to maintain an "L shape," and may later transition from a steep drop to a relatively steady one.
This was the forecast of Li Wei, director of the Development Research Center of the State Council, China Daily reported.
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"China's economy was quite stable in 2016. On a year-on-year basis, the producer price index and corporate profits increased and the unemployment rate declined, " Li explained during a recent forum hosted by the research center.
"To a large extent, the risk of a rapid decline in China's economic growth rate is reducing while the stable factors are increasing. Thus, it is hopeful that the L-shaped growth trend may transit to a relatively smooth flat line," he added. Li predicted that China's economy in 2017 will be characterized by peaks and valleys, as there will be a slight decline in investment, but a steady increase in consumption and exports.
He explained that the Chinese government's economic restructuring in 2016 has already produced positive results as reflected by key indicators. Moreover, Li anticipated the country's economy to experience "high speed" growth in the medium to long-term.
For his part, Zhang Junkuo, deputy director of the center, noted that the nation's economy shows a positive and continually improving trend. However, despite the positive outlook on China's economy, Zhang said that many challenges lie ahead.
According to him, the possibility of an economic downturn still exists, while recovery still has to gain more momentum. "We must keep a clear understanding and continue finding more effective resolutions," Zhang said.
In the meantime, foreign investors and economists are also bullish on China's economy, as they expressed optimism on the country's growth trajectory, Xinhua reported.
A 118-page report, US investment bank Morgan Stanley noted that although China may experience slower growth, the incomes of its people are rising. The bank pointed out that China's economy grew by 10 percent from 1979 to 2010. However, as the nation shifted from an export-driven to a consumer-powered economy, the country started to experience slower growth.
For its part, the World Bank reported that China's per capita income has reached $8,100 and may soon pass the $12,500 in order to reach high-income status. This is a key development for China's economy, as higher incomes result in higher consumption, the bank said in its report.
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