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China Voice: Farewell to GDP obsession shows resolve for real reforms
2016/01/19

BEIJING, Jan. 19 (Xinhua) -- The 6.9 percent GDP growth rate reported for 2015 falls within the "about seven percent" target set last March, underscoring the government's sophisticated insight and management of economic performance.

China's weakest full-year growth in a quarter of a century should not be deemed as a setback, but a rebalancing act for a more vibrant comeback.

The slower growth did not come as a surprise. The Chinese government is well aware of the slowing economic expansion accompanied by falling industrial product prices, shrinking enterprise profits, waning fiscal revenue and rising financial risks, which are more structural than cyclical problems.

Avoiding whitewashing or lament over these disappointing figures, China is facing the challenges squarely and knows well that the lackluster numbers do not tell the whole story.

Against international and domestic trade and financial market headwinds, the Chinese economy, with an economic volume of over ten trillion U.S. dollars, sailed rather smoothly in 2015, with impressive employment conditions and income rises for urban and rural residents.

The 6.9 percent economic expansion rate is an impressive figure from a global perspective, with China contributing more than 2 percent to global economic growth last year.

Meanwhile, with a gradual, steady rebalancing of the growth model taking shape, the Chinese economy has great resilience, huge potential and ample room for readjustment.

The conditions supporting high productivity remain stable. China's employed population amounts for about 70 percent of the total population, offering abundant a workforce for continued growth despite a marginal drop since 2014.

The country also continues to enjoy abundant capital reserves with an average national deposit ratio at more than 40 percent for the past twelve years.

The housing market is undoubtedly in bad shape currently, but the glut will be gradually digested over time thanks to accelerating urbanization.

While property sales and factory construction are slowing, the rising middle class are eagerly spending money on healthcare, overseas travel and movie tickets. The government bid to rebalance the economy toward consumption has received a boost from services, which account for over 50 percent of GDP, the first time in history .

Uneven regional growth also means more potential in investment and consumption. The government's decision to lift more than 70 million poor Chinese out of poverty will unleash a continual stream of fresh growth.

In addition, China has taken unprecedented steps, from subsidies to venture capital financing, to promote innovation and entrepreneurship as new growth engines.

The economic numbers might continue to look undesirable in years to come, especially for sectors burdened with overcapacity. There will be a tough battle ahead to deepen reforms. The Chinese leadership, however, is determined to get real with reforms despite short-term pains.

Firms in industries facing overcapacity will merger or go bankrupt. The bloated state-owned enterprises will be streamlined. The government will be committed to pushing forward structural reforms, especially on the supply side, to reduce overcapacity, destock, deleverage, lower cost and shore up weak growth areas.

Of course there will be no miraculous V-shape economic recovery, but after painstaking structural reforms, the world can expect a more sustainable and vibrant Chinese economy.

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