China dwarfs other economies in 2016 growth

By Lu Yanan, Wang Weijian from People’s Daily


Despite sluggish global economy, China posted GDP growth at 6.7 percent year-on-year to 74.41 trillion yuan in 2016, dwarfing other major economies of the world, Chinese official told a recent press conference. Economists stressed that with a 33.2 percent contribution, China remained a key engine of global economic growth.


“China’s economy expanded by 6.7 percent last year, a good start for the country’s 13th Five-Year Plan (2016-220),” Wang Guoqing, spokesperson for the fifth session of the 12th National Committee of the Chinese People’s Political Consultative Conference (CPPCC), said at a press conference Thursday.


The record low growth since 1991 sparked the legislators and policymakers’ debates on whether Chinese economy will hit a bottom, maintain a medium-to-high-speed growth or keep its driving forces.


These deputies will give their suggestions on China’s economic and social agendas during the annual sessions of the National People’s Congress and CPPCC that kicked off over the weekend.


Liu Zhibiao, member of the CPPCC National Committee and professor with Nanjing University, eased the market concerns, saying that China has no need to be anxious at all, because though the number was a dramatic fall compared with previous years, it far outnumbered other economies worldwide.
The International Monetary Fund (IMF) previously slashed its estimate for growth in the US economy in 2016 to 1.6 percent, and predicted a 1.7 percent growth for Eurozone, 0.9 percent for Japan, 6.6 percent for India and 0.3 percent for South Africa.


Though the growth was the lowest one in 26 years, China maintained as a big driver to world economic growth by contributing 33.2 percent of the expansion. Its economic aggregate exceeded 70 trillion yuan for the first time.


Li Wei, director with the Development Research Center of the State Council, added that the growth trajectory of Chinese economy may well be already in the second phase of an L-shaped recovery, and there is now less risks for a sharp growth fall.


Despite of a slower growth, the economy now develops along a healthier track, which can be proved by a faster growth of resident income than GDP, as well as a more optimized, coordinated and sustainable structure.


Data showed that in 2016, China registered a 6.9 percent year-on-year increase in gross national income. The added value of the service sector increased 7.8 percent year on year to 38.4 trillion yuan last year, contributing 51.6 percent to GDP, 1.4 percentage points more than the previous year.


“Costs have to be paid to restructure economy, it is inevitable but will be rewarding,” Liu explained, encouraging the Chinese economy to take the bull by the horns.


Analysts believed that China can afford the prices to restructure the economy. The process may, in a short run, reduce local governments’ GDP and fiscal revenues, tighten the pocket of business, and expose their risks, but in a long term will add more fuels for sustainable growth.


Those structural adjustment will release more resources like idled land and credit, and then allocate them to those needed industries, they added.


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