China makes progress in rebalancing economy, JPMorgan says

Although economic growth slowed down in the third quarter, there are signs that China has made positive progress in its effort to rebalance growth mode with structural reforms, JPMorgan said.

Latest economic data showed that consumption contributed to 48.5 percent of economic growth in the first three quarters of 2014, compared with 41.5 percent by investment and 10 percent by exports.

"That has shifted from an excessive dependence on investment in the past few years, reflecting optimistic improvement in restructuring economy toward a consumption-based growth mode," Zhu Haibin, chief China economist at JPMorgan, told a media conference in Shanghai today.

Achievements in economic rebalancing were also reflected in a narrowing gap between urban and rural income levels, with rural household income rising 9.7 percent in the first three quarters of the year, higher than an increased of 6.9 percent in urban household income, Zhu said.

Zhu said the government is sticking to its reform agenda despite the challenging economic condition.

In the past few months, the government has announced a slew of measures to support growth of emerging industries such as the tourist industry and the health-care service in order to generate new sources of growth.

Efforts have also been made to push forward on fiscal system reform, land reform and state-owned enterprise reform.

"These structural reforms, together with fiscal and monetary policy responses in a more controlled manner, are positive for China to achieve sustainable growth in the long run," Zhu said.

The investment bank has raised its forecast for China's full-year growth rate this year to 7.4 percent from the previous 7.3 percent.