China’s President Xi Jinping appeared to signal his country’s economic growth rate may continue to slow in the coming year during a speech at the Asia-Pacific Economic Cooperation CEO Summit in Beijing Sunday. “Even a growth rate of about 7 percent will put China among the top performers in the world in terms of both speed and size,” Bloomberg News quoted Xi as saying.
China’s growth rate fell to 7.3 percent in the third quarter from 7.5 percent in the second quarter. It was the smallest year-over-year growth rate in the world’s second-largest economy since 2009, as measured by the changes in gross domestic product reported by its National Bureau of Statistics. Xi’s comments at the APEC CEO Summit indicate the nation’s leaders are anticipating even more of a slowdown.
“Some worry whether China’s growth rate will slow down further, or whether China can overcome the obstacles: Risks are indeed there, but they’re not that scary,” Xi said.
In dealing with this nonscary economic slowdown, Chinese authorities have acted to loosen both fiscal and monetary and policies since April to ensure the country’s economy can grow by about 7.5 percent this year, Reuters reported.
On the fiscal side, regional governments have abolished limits on the number of homes that citizens can buy and accelerated spending on some infrastructure projects. On the monetary side, the People’s Bank of China has cut mortgage rates for some home buyers and injected short-term loans into banks to increase the credit supply.
More recently, Xi announced a $40 billion Silk Road Fund for infrastructure Saturday. The fund’s investments will encompass connectivity and infrastructure projects, including new airports, ports and railways. They will support China’s Silk Road Economic Belt and 21st Century Maritime Silk Road initiatives to improve the economy in the Asia-Pacific region.
Along a similar line, China’s National Development and Reform Commission has OK’d 693.3 billion yuan ($113.24 billion) worth of infrastructure projects within the country in recent weeks. These projects also will include new airports and railways -- five of the former and 16 of the latter -- according to accounts carried by the state-run China National Radio and Xinhua News Agency.
Still, China’s economic growth rate seems destined to slip a little -- or a lot -- more between 2014 and 2015, one analyst cited by Bloomberg News indicated. “Seven percent looks like the consensus for growth target next year,” noted Shen Jianguang, the Hong Kong-based chief Asia economist at Mizuho Securities Asia Ltd. And, he pointed out, “I think a lower bottom line of growth of 6.7 percent should be also acceptable.”