China’s economy averted a steep slowdown and is poised to grow “reasonably fast” as incomes in the most-populous nation rise, a former adviser to the country’s central bank said.
Li Daokui (李稻葵), an economist at Tsinghua University who was an adviser to the People’s Bank of China (PBOC) from 2010 to last year, said in an interview with CNN that China’s decision to speed up construction projects kept its rate of growth from slowing more than it did.
“A soft landing is there,” Li said in an interview with CNN’s Fareed Zakaria GPS, which was to air yesterday, according to a transcript.
“A hard landing has been already avoided. I’ve been talking about this for the past two years — maybe two-and-a-half years — that is the growth rate will slow down a little bit and then pick up,” he said.
China’s GDP grew by 7.9 percent in the final three months of last year, halting a seven-quarter deceleration. Growth was fueled by government efforts that drove a rebound in industrial output, retail sales and the housing market.
Li said the government helped buoy the economy by speeding up work on railroad projects and new steel factories.
With the country’s per capita income 18 percent of that in the US, Li said China will continue to grow quickly as its economy bridges the gap with the rest of the world.
“The economy is still a poor economy,” he said.
“So there’s a long way to go for the Chinese economy to catch up. So that fundamentally, there are still basic forces, both on the demand side, supply side, so on and so forth, to push the economy to grow reasonably fast,” he added.
Speaking at a meeting of finance ministers and central bankers from G20 nations in Moscow, PBOC Governor Zhou Xiaochuan (周小川) said China’s policies to boost domestic demand and restructure the economy have borne fruit, Xinhua news agency said in a report on Saturday.