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China's lower growth target 'healthy for economic developments'

2015-03-13 13:07 Xinhua Web Editor: Gu Liping

China's move to lower its gross domestic product (GDP) growth target for 2015 signals more healthy and sustainable economic development in the future, U.S. experts have said.

The target, which was unveiled in a government work report by Chinese Premier Li Keqiang to the third session of the 12th National People's Congress (NPC), was tuned down to "around 7 percent," a level not seen since 2004 and 0.5 percentage points lower than that of 2014.[Special coverage]

The lower GDP growth expectation set by the Chinese government was in accordance with "the new normal" it has been talking about for some time, showing China is transforming into a more advanced economy with reforms that occur in different sectors, said Ann Lee, an adjunct professor of economics and finance at New York University.

According to Premier Li, the "new normal" means slower growth but is characterized by sustainable and quality growth for several decades to come.

"China is undergoing a transition from fixed asset investment, export-driven economy to a consumption-focused one, and is moving up the global value chain, which is the most important economic initiative," Brendan Ahern, managing director of U.S. Financial Consultant Krane Shares, told Xinhua in a recent interview.

Ahern's words were echoed by Michael Zakkour, principal of U.S. consulting firm Tompkins International. The slowdown is a good sign for China to mature from a developing economy to a fairly developed one, he said, adding that China is now taking its place in the world as a major economic influence as well as a world leader.

Figures showed China contributed about 30 percent to the global economic growth in 2013 and was ranked as the second largest economy in the world in 2014 with a total GDP of over 10 trillion U.S. dollars. Experts shared the opinions that the world economy would benefit from the ongoing economic transformation in China.

A healthy Chinese economy is good for global economic developments, and countries delivering consumption goods and services to China will sure be benefited, Ahern said.

As an expert in U.S.-China trade business for years, Zakkour saw huge potentials of Chinese domestic consumption in the course of economic transformation. "There are hundreds of millions of people in China having some level of disposable income. The growth and power of Chinese consumers are going to change China and the world," he said.

Experts also saw some challenges lying ahead. Larry Delson, who has almost 30 years of trade experience with China as the founder of Delson International, said that environmental protection is a real obstacle China needs to overcome.

"China's economy is huge and it will take time to make the adjustment. I believe that with the strong leadership to drive this important change, China's economy will be more stable and healthy," said Ahern.

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