Cool heads needed in viewing China's economy

Recent statistics show China's industry, investment and consumer price index grew at a slower pace, but these are temporary fluctuations and no cause for panic as several upbeat signals were easily overlooked amid the gloom. Every coin has two sides. China's Consumer Price Index increased 1.8 percent year on year in April, much lower than the 2.4 percent in March. But the positive view is that China has no worries about inflation and is in a strong position to keep its interest rates low. China's producer price index contracted 2 percent in April, following a 2.3-percent decline in March, pointing to low confidence among enterprises. But this was a lag effect reflecting the winter slowdown and should not be read as a sign of the future. The real estate development climate index dropped 0.61 points from March to 95.79 points in April, its third consecutive monthly decline. But China's central bank responded quickly, urging commercial banks Tuesday to speed up approving and issuing loans to qualified home buyers. On a positive note, the 8.7-percent year-on-year industrial added value growth reading in April, if sustained in May and June, means gross domestic product (GDP) expansion in the second quarter could be similar to the 7.4-percent pace in the first quarter of 2014. The purchasing managers' index (PMI) for the manufacturing sector also rose, to 50.4 in April, up from 50.3 in March. Foreign trade in the first four months of this year saw a moderate increase through policy support and improving exports to major countries, though the global economic situation is gloomy in general. So the picture is not as gloomy as some foreign media insist. After robust growth at an average annual rate of nearly 10 percent over the past 30 years, the Chinese economy has expanded into the world's second largest, and is gradually losing its heavy dependence on exports and investment as it pushes for quality and efficiency in its products. Undoubtedly, economic transformation in any country will take time and take a toll. As President Xi Jinping said recently, China should adapt to new norms for its economic growth and stay cool-headed about the slowdown, as should other countries. The Chinese government has released a series of economic reform policies and attached great significance to the prevention of various risks for its economy. It has also taken timely countermeasures to reduce potential negative effects. The State Council, China's cabinet, issued a key document Friday on promoting healthy development in the domestic capital market. It maps out guidelines for reform, development and supervision of China's stock, bond and fund markets. The release of the new document, also known as the "New Nine-Article Cabinet Document", marks the birth of a program for protecting the interests of small investors on China's capital market. On Wednesday, the State Council announced an acceleration in the development of production-oriented service industries in a bid to step up industrial restructuring and support economic growth. Priority will be given to the development of research and design, commercial services, marketing and after-sales services, and will be driven by the market and innovation, according to an executive meeting of the State Council chaired by Chinese Premier Li Keqiang. The move is expected to stimulate domestic demand, boost employment and improve people's lives, as well as stabilize economic growth. It will also help the sector move up the value chain, and prompt integrative development of the country's tertiary, agriculture and industry sectors. As for foreign trade, Chinese leaders are trying to create new opportunities using their new way of thinking. For instance, Premier Li took railway diplomacy to Africa during a recent tour. Some economists think similarly, deeming that infrastructure investment will become a main engine for global economic recovery and even prosperity. People's Bank of China Governor Zhou Xiaochuan said at the weekend the central bank would only fine-tune its policy to counter economic cycles and would not carry out large-scale incentive policies to boost activity. In a word, China is vigilant about its economic challenges and will not over-react to the pressure of the slowing momentum. Those books and articles that trumpet the fading of China to boost their sales should stop uttering nonsense and make a fair analysis and judgement of China first.