China's economic trend to be 'L-shaped': People's Daily

A man riding an electric bicycle with goods along a street in Beijing on May 8, 2016.
A man riding an electric bicycle with goods along a street in Beijing on May 8, 2016. PHOTO: AFP

SHANGHAI (REUTERS) - China's economic trend will be"L-shaped", rather than "U-shaped", and definitely not"V-shaped", as structural reforms take time, the official People's Daily reported on Monday, citing an "authoritative source."

The newspaper, regarded as the Communist Party's mouthpiece, said the government will not use excessive investment, or high rates of credit growth to stimulate growth.

Although China's economy stabilized in the first quarter, much of the growth was investment-driven, but structural problems persist, meaning it could take many years before new engines of growth can take a leading role, the newspaper reported.

China must step up supply-side reforms, and there is no need to stimulate growth by excessive credit growth that could heighten risks and could trigger a systemic financial crisis if not controlled properly, the newspaper said.