Path:Sino-US›› China News>> Today's Article››
China gives its economic forecast at G20

China's financial markets are expected to remain stable and the renminbi is not on course for a long-term devaluation, while fiscal spending will grow faster than expected this year, the country's top financial officials told the G20.

Chinese Finance Minister Lou Jiwei said that central government spending will rise 10 percent this year, more than the 7 percent growth budgeted at the start of the year, according to a statement late Saturday on the People's Bank of China website. China will raise dividend payments from designated state-owned enterprises to make up for any shortfalls.

China's overall GDP growth will remain around 7 percent, as predicted earlier in the year, and the new economic normal may last for four to five years, Lou said. The government will not particularly care about quarterly economic fluctuations and maintain steady macro-economic policy, he added.

China can no longer rely on policy supports to achieve 9-10 percent growth, as it may already take several years to digest excess industrial capacity and inventories, the finance minister said.

It will go through "labor pains" in the next five years as it aims to complete main structural reforms by 2020, Lou added.

The quality of growth, however, is already improving with 7 million jobs created in the first half of the year, consumption overtaking investment in contributing to economic growth and the balance of payments becoming more even, he said.

Also at the G20, People's Bank of China Governor Zhou Xiaochuan pointed out in the statement that there is no foundation that renminbi will keep devaluing for a long term.

The yuan-US dollar exchange rate is relatively stable, the stock market is already roughly where it should be and financial markets are expected to be stable, Zhou said.

China is headed for its slowest economic expansion in 25 years in 2015 and mainland markets have slumped 40 percent since mid-June, sending global financial markets skittering.

China has been taking measures to prevent its economy from systematic risk including the PBOC providing liquidity to the market through multiple channels.

The measures taken by the Chinese government has prevented the stock market from decline in precipice way and the occurrence of systematic risk.

Confidence

At the 2-day G20 Finance Ministers and Central Bank Governors Meeting held in Turkey on Friday and Saturday, finance ministers from the G20 nations insisted the global economy has nothing to fear from a China slowdown as they tried to dispel the pall of gloom that has been cast by sagging growth and market turmoil.

European ministers showed firm support for Beijing, which convinced many G20 officials that its devaluation and new currency management arrangements constituted a step towards a more market-determined exchange rate rather than a ploy to boost exports.

German Finance Minister Wolfgang Schäuble said that the G20 agreed there was no reason to fret over slower Chinese growth, while Pierre Moscovici, the EU Commissioner for economic affairs, praised "the absolute determination of the Chinese authorities to sustain growth".

US support was more tempered. US Treasury Secretary Jack Lew pressed Lou for a signal that China would allow market pressures to drive the renminbi up as well as down.

So far, economists have struck a sanguine tone about the impact of China's malaise on American growth — one of the global economy's few bright spots — ahead of a US Federal Reserve meeting on whether to raise record low interest rates for the first time in nearly a decade.

Global growth forecasts have been coming down, with the International Monetary Fund expected to cut its outlook in its autumn update, but direct linkages between China and the US — the world’s two biggest economies — are narrow.

This suggests that a sharp Chinese downturn could leave the US economy less waterlogged than many of its partners.

Earlier G20 officials said that the Chinese devaluation of the renminbi in August and the stock market plunge were all part of a difficult path to a more liberal economy.


Explore Hunan Promote Hunan
Related Stories
Share this page
Touched Sympathetic Bored Angry Amused Sad Happy No comment
About us

Rhythm Media Group is a multi-media company, operating a US-based Chinese daily newspaper, The China Press, and the paper's website - uschinapress.com (which has mobile-app version), as well as a Beijing-based English website Sino-US.com. The group boasts 15 branch offices across the US, and a number of cultural centers focusing on culture-related business in the North America, Chinese mainland, Hong Kong and Taiwan.

Launched in September 2012, the Sino-US.com is designed to serve as a bridge between China and the US, and to keep its readership inside or outside China better informed by providing news and insights on China's current affairs, culture, life, business, people and sports.

Our Partners

About us - Contact us - Copyright - Terms of use - Privacy policy

Copyright © 2012 www.sino-us.com All Rights Reserved

京公网安备11010802011260