Economy still in upward phase despite weak figures

Photo taken on April 9, 2014 shows the scene of the TV debate named "Debate on Economics: Keynesian vs Supply-Side" during the Boao Forum for Asia (BFA) annual conference 2014 in Boao, South China's Hainan province, April 9, 2014. [Photo/Xinhua]

Despite recent softening economic figures, China's economy remains resilient and could maintain a growth rate of 7 to 8 percent in the next five years, Zeng Peiyan, vice-chairman of the Boao Forum for Asia, said on Wednesday.

China's GDP growth target for 2014 set at 7.5 percent

Infographic: Five key words from Li's govt report

Speaking at a panel discussion attended by foreign political and business leaders, Zeng, also former vice-premier, attributed the weakening investment growth in the first two months to the central government's control on local government debt, a curb on investment in a number of industries experiencing overcapacity, lower inventories and volatility in the real estate market.

Fixed-asset investment growth in the first two months dropped to a record low of 17.9 percent, down from 19.3 percent for the whole of 2013. Industrial output in the January-February period also dropped to the lowest reading since April 2009.

He conceded that these figures may push first quarter growth under the official target of 7.5 percent, but he expected the trend to reverse in the second and third quarters due to moderate government stimulus.

"Overall, China's economy is still in its upward phase and the resilience is still there. I think it would be no problem for the economy to grow in the 7 to 8 percent range for the next five years," he said.

He is also optimistic about Asian and emerging economies' growth outlook, saying there is little possibility of an economic crisis in these economies.

"The situation now is very different from what it was in the 1997 Asian financial crisis. The region's ability to ward off financial and economic risks has improved. Many countries' foreign exchange regimes have become more flexible, and some regional mutual rescue frameworks have been established," he said.

Economy shows 'optimistic changes': Li

Manufacturing under lingering pressure