Economic slowdown brings opportunities, not fears

WASHINGTON -- As a big player in global economy, China posted a three-year-low growth rate of 7.6 percent in the second quarter, triggering fears of a hard landing of its economy.

But some experts here saw little reason for such concern, saying the slowdown is more of Beijing's self-initiated efforts to restructure its economy and to shift its development model.

They also said the deceleration, which comes as expected, would allow more space for the country to put its growth on a sustainable path.

Not a surprising decline

Nicholas R. Lardy, a senior fellow at the Peterson Institute for International Economics, said the slower growth "is not necessarily a bad thing", as it still falls within the official growth target of 7.5 percent set up at the beginning of the year.

The fine tuning showed Beijing cares more about the quality and sustainability of its economy rather than growth figures, he said. 

In this connection, "this (the slowdown) is fully consistent with what they are trying to achieve," Lardy said.

Michael Pettis, a senior associate in Carnegie Endowment for International Peace, a Washington-based think tank, said "it is almost impossible for China to re-balance except under conditions of much slower growth and rising real interest rates."

"The fact that Beijing allowed growth to slow so sharply, and more importantly that it has refrained from lowering interest rates as quickly as inflation has declined, shows that the leadership is willing to take decisions that are necessary for sustainable Chinese growth in the medium term," he told Xinhua in an interview.

Yukon Huang, also a senior associate at Carnegie Endowment for International Peace, said the disappointment at China's growth figures reflects how dependent everyone has become on China to propel the global economy given the protracted economic woes still plaguing the United States and Europe.

The slowdown in China's economic progress might rattle other economies, Huang said, but for Beijing itself, slower growth can be a good thing if it is part of a transition to a more efficient and sustainable growth path.

Ample space to avoid hard landing

The International Monetary Fund on Monday revised down its projections for China's growth this year from 8.2 percent to 8 percent, citing external shocks as a major drag.

As the eurozone debt crisis reaches a crescendo and US flagging economy continues to weigh on global markets, China would face more downward risks.

Chinese Premier Wen Jiabao warned the economic hardship may continue for a period of time, promising further efforts to fine-tune policies to make them more targeted, foresighted and effective.