Chinese economy endeavors to maintain stable growth

The Chinese economy endeavors to maintain its trend of stable growth while facing an uncertain global economy and a long road to transforming itself. Some experts are prudently optimistic about prospects for the Chinese economy, while others have expressed their concerns. Official data shows China's foreign trade reached 382.4 billion U.S. dollars in January, up 10.3 percent from the previous year. The manufacturing purchasing managers' index retreated to 50.5 percent in January, a low last seen in August 2011 though still above the 50-point level that demarcates growth and contraction. China's consumer price index, however, remained flat at 2.5 percent year-on-year in January, a month when people usually shop before the Chinese lunar new year, which started on Jan. 31 this year. The International Monetary Fund estimated recently that the Chinese economy would increase by 7.5 percent and 7.3 percent in 2014 and 2015 respectively, 0.3 percentage points and 0.2 percentage points up from its previous forecast. Joydeep Mukherji, managing director for sovereign ratings at Standard and Poor's, said in January the rating agency would not change its rating on China's sovereign debt after China's latest estimation showed growth in liabilities directly carried by governments at various levels. If the Chinese economy grows by 7.5-8 percent, its capacity to service the debt was extremely strong, Mukherji said, voicing his confidence the growth engine of the world's second largest economy was still good. "As long as growth is there, the (Chinese) government would have the money to pay for all their debt one way or another, whether local government debt or its own debt, because the money is coming in," Mukherji said. Shen Jianguang, chief economist with Mizuho Securities, said the inflow of capital from emerging markets and a large space for the renminbi's appreciation might blow bigger bubbles in China's housing market. Officials of China's State Administration of Foreign Exchange said risks for the inflow and outflow of hot money coexist in 2014. Ma Jiantang, commissioner of the National Bureau of Statistics (NBS) of China, said the trend for the Chinese economy would not change much as long as China continued to promote urbanization, industrialization, informatization and agricultural modernization. During this process, Ma said, massive demand for investment and consumption would be created and efficiency of supply would be improved. The NBS said China's economy grew 7.7 percent in 2013, the same as 2012, overshooting the government target of 7.5 percent, and gross domestic product totalled 9.3 trillion U.S. dollars. The Chinese economy can maintain stable growth thanks to a good environment brought by its peaceful development policy abroad and the reform and opening-up policy at home. However, no tangible results had been achieved since China called for transforming the economic growth mode nearly two decades ago, Chinese economist Wu Jinglian said, highlighting that marketization would make a breakthrough in China's economic transformation. Joachim Fels, Morgan Stanley's chief international economist, warned China's transition from export- and leverage-driven growth to consumption- and reform-driven growth could turn out to be more tricky in the near term, mainly because financial conditions had tightened considerably, as evidenced by higher money market rates and bond yields. How to ensure the implementation of reform measures, promote comprehensive reform, change the current structure of interests while coordinating effectiveness and fairness, are the issues facing Chinese policy-makers.