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Better GDP growth rebuts 'China collapse' theory

China Daily | Updated: 2014-04-19 07:32

Official data show that China's GDP grew 7.4 percent year on year in the first quarter, 0.3 percentage point lower than the pace in the previous three months.

No sooner did Chinese statistical authorities release the figures than some merchants of doom pointed at the slowdown and whipped up a new round of gloom-mongering over the future of the world's second largest economy.

But their claims that China's economic impetus is fizzling out and that the Asian giant is headed for an economic hard-landing are baseless and misleading.

For starters, despite heavy downward pressure, China's pace of growth in the first quarter still exceeds the 7.3 percent market estimation and belongs to the top echelon across the world, especially among the major emerging economies.

Factoring in Beijing's strong-willed and game-changing endeavors in economic restructuring, the 7.4-percent rate remains within the reasonable range, an issue that has been emphasized by Premier Li Keqiang on different occasions.

After all, it is natural for an economy to decelerate during structural adjustment, and the results of a better-structured economy and a more balanced growth pattern will make the downtick worthwhile.

As a matter of fact, most economic observers and pundits worldwide remain sanguine about China's economy. Their optimism is perceptive and well-founded.

China's efforts to boost domestic consumption have begun to pay off. As a manifestation of the increasingly large role of consumption spending, the household final consumption expenditure accounted for 64.9 percent of GDP in the first quarter.

In another sign of the great growth potential of the Chinese economy, official figures show that in the first three months traditional industries such as steel and cement were outpaced by high-tech industries, which constitute a pillar of future growth with mounting significance.

Meanwhile, with business activity picking up, China's endogenous power of economic growth has gradually recovered. Employment is also improving, and foreign trade is making a turn for the better as the recovery of European and US economies takes root.

After more than three decades of rapid economic growth, the Chinese government and public have both realized that pursuing growth at all costs is not good at all.

What China really needs is not an economy expanding at a blistering pace but one that grows in a sustainable and healthy manner at a reasonable and steady speed. And China is getting just that.

So now is the time to bet on China, not to short it.

Xinhua

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