Reforms will help economy grow steadily, says expert
China's economic growth is expected to further slow to 7.1 percent in 2015, as the country adjusts to slower but more sustainable growth, the World Bank said in a report on Wednesday.
The government has stepped up efforts in structural adjustments and financial reforms, in a move to add vitality to the economic growth, which eased to a 24-year low of 7.4 percent last year and a six-year low of 7 percent quarterly growth in January-March.
"Over the medium term, these efforts are helping China gradually shift its growth model from manufacturing to services, from investment to consumption, and from exports to domestic spending," Karlis Smits, senior economist at the World Bank, was quoted as saying in the report.
The estimated GDP growth figure is in line with analysts' overall expectations, said Xie Yaxuan, a research fellow with China Merchants Securities.
"While the economy is slowing down, more policy efforts are expected to address medium and long-term challenges," Xie told the Global Times Wednesday.
The Chinese government has already controlled credit growth, tackled excesses in shadow banking and implemented more regulations on local government debt, which have together led to a slower investment growth, according to the report.
But those measures will help the economy grow in a more steady way, Zhao Xiao, a professor at the University of Science and Technology in Beijing, told the Global Times Wednesday.
Zhao noted that authorities have been controlling key risks for the economy since 2014. "For example, the government issued a regulation at the end of 2014 to reclassify the creditworthiness of local government projects and identify the liabilities of local governments, which brought local debt levels under the control," he said.
The World Bank's report also highlighted issues facing the country in 2015, such as overcapacity in heavy industries, slower export growth and the sluggish property market. But it noted that the services sector has been experiencing rapid growth, particularly in banking and insurance sectors.
The manufacturing purchasing managers' index (PMI), a key measure of factory activity in China, posted a reading of 50.2 percent in June, unchanged from May, according to data released by the National Bureau of Statistics (NBS) on Wednesday.
Though the figure is slightly below analysts' expectations, it was above the 50 percent mark for the fourth consecutive month, a level that separates expansion from contraction, according to media reports.
