While China’s slowing economic growth in the second quarter renewed concerns about a “second-dip” of the world’s third largest economy, an analyst was quoted as saying in a Xinhua report that it is not likely to happen, as the slower pace does not necessarily mean low level growth.
China’s gross domestic product (GDP) grew 10.3% between April and June, retreating from the 11.9% growth in the first three months, as the effects of the 4-trillion yuan stimulus packages weaned off which eased fixed-asset investment expansion.
Lian Ping, chief economist of the Bank of Communications, said that though the growth slowed, but the 10.3% was still strong, even 9% growth was high enough for the Chinese economy.
“The growth rate is unlikely to fall below the 6.1% rate in the first quarter of 2009 when the economy decelerated to a decade low as it was hard-hit by the global financial crisis. A double-dip is not going to happen,” he said.
He noted investment was a crucial engine for the Chinese economy, therefore it deserved consistent attention and efforts as exports and consumer spending were unlikely to play a decisive role in powering growth.
Although China’s exports rose significantly in the second quarter, Lian said that would not continue in the third quarter as the negative impact of the European sovereign debt crisis on China’s external demand would gradually emerge.
He said people should not worry too much about the normal fluctuations of the economy, which was currently still on track. The macro-economic policy should be kept stable, in order to give investors correct market expectations.
Chinese President Hu Jintao has said that the government should stick to the pro-active fiscal policy and moderately loose monetary policy in the second half of this year to ensure a stable and relatively rapid economic development.
Speaking at a symposium held in Beijing last Tuesday, with attendance of people from the non-communist parties and the All-China Federation of Industry and Commerce, as well as celebrities without party affiliations,
Hu said the economy is developing in the right direction under the government’s macroeconomic controls and the government would maintain the continuity and stability of its economic policies to make them more targeted and flexible according to new conditions.
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