BEIJING • The risk of a steep slide in China's economy has declined, the head of a government research centre said yesterday, adding that the country had moved through an "L-shaped" pattern of slowing to now "horizontal" growth.
China's economy grew 6.7 per cent last year, according to the government, the slowest pace in 26 years. The country met its growth target with support from record bank loans, a speculative housing boom and billions in government investment.
But as Beijing moves to cool the housing market, slow new credit and tighten its purse strings, China will have to depend more on domestic consumption and private investment. The government last week trimmed its economic growth target to about 6.5 per cent for this year.
Mr Li Wei, director of the Development Research Centre of the State Council, China's Cabinet, said many positive economic signs were emerging domestically and internationally, and the risk of a large slide in economic growth had "clearly lowered".
China's economic development has gone from a "downward stroke in the L-shape to the horizontal stroke", the official Xinhua news agency said, citing Mr Li's comments on the sidelines of China's annual parliamentary session.
The horizontal trend points to long-term steady development, but does not eliminate the possibility of short-term fluctuations, or mean the economic transformation is complete, Mr Li said.
"Our economy still has many difficulties to resolve, so we must prepare to respond to the emergence of possibly relatively large risks," he added.
Earlier yesterday, a vice-chairman of the state economic planner said China's industrial output grew more than 6 per cent in January and February, and that the survey-based unemployment rate in 31 major cities was about 5 per cent for the two months.
National Development and Reform Commission vice-chairman Ning Jizhe gave the approximations, which were in line with expectations for official data set to be issued tomorrow.
Fixed-asset investment growth kept pace with the final few months of last year, Mr Ning said. "China's economic growth still mainly relies on domestic demand," he added.
January and February data will be released together in a bid to smooth out seasonal factors caused by the timing of the long Chinese New Year holidays, which began in late January this year but fell in February last year.