Nation to see 6-7% growth, says senior economist

A Chinese worker processes steel at a factory in Qingdao city, East China's Shandong province, July 1, 2016. [Photo/IC]

China will probably achieve an annual GDP growth of 6 to 7 percent in the coming decade, Lawrence Lau, senior economist of the Chinese University of Hong Kong, said on Thursday.

The world's second-largest economy managed to grow 6.7 percent year-on-year in the first three quarters, but the growth challenge will become ever more severe in the coming years as its restructuring reforms continue.

"I'm optimistic that China's economy can grow by 6 percent to 7 percent for the next five to 10 years," Lau told a symposium held by the Asian Development Bank (ADB) to commemorate the 30th anniversary of its partnership with China.

China has set a target for its GDP and per capita income to double from 2010 to 2020. It means its annual GDP growth should be about 6.5 percent to meet that target. But as it carries out economic restructuring reforms amid the unstable global economic situation, which has already driven down its industrial and export growth, some analysts have doubted whether China can achieve its economic goals by 2020.

Lau said the Chinese government has done a fairly good job in maintaining the growth momentum. "Although growth rate has dropped, it has maintained it at above 6 percent," he said.

He said China should pay close attention to the problem of inadequate demand. "It is a big problem and policymakers can make policies to stimulate demand."

But he said China has an advantage in stimulating aggregate demand through government policies. For example, he said, as it tries to lower the PM2.5 (very small particles able to enter the lungs and bloodstream to seriously damage health) levels in big cities, China can increase demand for environmental protection-related products and services.

Lau also praised China's economic achievements in the past more than three decades. China has maintained a GDP growth of about 10 percent on average since the early 1980s, which is a "miracle" and a "spectacular success", Lau said.

Chinese officials participating in the ADB symposium said the ADB has played an important role in helping China achieve that success.

"The ADB has provided resources, techniques, and policy suggestions to support and promote China learning from other countries and more closely cooperating with Asia and other countries," said Chen Shixin, a senior official at the Ministry of Finance.

China and the ADB will continue to engage in close cooperation as China restructures its economy, participants said.

"The ADB aims to increase its lending to China along with our total lending capacity," said Takehiko Nakao, president of the ADB. Priority will be put in areas such as environmental protection and climate change, regional cooperation and integration, reduction of poverty and inequality, promotion of innovation, and institutional reforms, he said.

"With the ADB's corporate target to double its climate financing from $3 billion a year to $6 billion by 2020, we will help China 'green' its economy." China became an ADB member in 1986 and received $34 billion in loan assistance from the ADB from 1986 to 2015.