Chinese economy deserves far-sighted optimism

BEIJING - China's 7.4 percent economic growth in the first quarter has dismissed fears about a possible "hard landing" of the world's second-largest economy, as some pessimists predicted.

Though it was the lowest quarterly rise since the third quarter of 2012, growth was stable and the economy was generally in good health, said the National Bureau of Statistics while announcing economic data on Wednesday.

China has set this year's economic growth target at about 7.5 percent. Last year, it saw 7.7 percent growth, the same rate as 2012 and the lowest since 1999.

Despite downward pressure in the short term, China's economy deserves far-sighted optimism, as opportunities and potential will arise from its restructuring, market-oriented reforms and opening up, which the top leadership has strived to promote.

"If you compare first quarter of this year to the same period last year and the year before, the first quarter has always been slower," said Kenneth Jarrett, president of the American Chamber of Commerce in Shanghai.

"Data from the last 12 years show activities pick up quarter by quarter. It is a consistent pattern," Jarrett told Xinhua. "I don't sense at this stage any alarm, or great anxiety on the part of our members about what this means for full year likely results."

One source of confidence is the encouraging performance of the Shanghai free trade zone (FTZ), which saw 433 foreign-funded firms registered in the first quarter. The number nearly doubled that of the previous quarter.

By the end of March, the number of new foreign companies hit 661 in the zone with accumulated registered capital of 3.3 billion U.S. dollars, said zone authorities.

"They (foreign companies) are here for the long term. Even if they track data from month to month, quarter to quarter, the focus is on longer term trends," said the American businessman.

The Shanghai FTZ, established in September, has undergone a string of key reform measures, including easing cross-border use of China's currency, the renminbi, liberalizing interest rates on foreign currency loans, and facilitating offshore financing and outbound investment. The Chinese government expects the FTZ's experience to be copied in other regions.

The FTZ is part of a package of reform measures in the country and only needs time to reap the benefits for sustainable economic growth.

The Chinese government has vowed to abolish or delegate another 200 administrative approvals to governments at lower levels this year, following 416 administrative approvals that were abolished or delegated last year.

China began adopting a package of business registration reforms on March 1, easing requirements for minimum registered capital and business venues.

The move has boosted a jump in new enterprises. Newly registered market entities increased 37 percent in Shanghai and 31 percent in the northwestern province of Gansu in March.

Nationwide, 309,500 new enterprises were set up in March, or a 45.8-percent year-on-year rise, and their total registered capital grew 103 percent to hit 1.47 trillion yuan, said the State Administration for Industry and Commerce on Wednesday.

The reform greatly boosted market vitality, said Chinese Premier Li Keqiang during an inspection tour last week in the southernmost province of Hainan after attending the Boao Forum for Asia.

To keep China's economic growth within a "reasonable range," local authorities must dare to shoulder responsibilities and work out effective measures to advance reform, expand domestic and international markets and nurture development momentum, he said.

"China's leaders want the government to retreat from being too active in the economy and let the market itself have a stronger role. And for foreign companies, that is good news because that's what they prefer," said Jarrett.

In the first quarter, inland Chongqing Municipality contracted foreign capital worth 410 million U.S. dollars, a 19-percent year-on-year jump. Its actual use of foreign capital hit 2.15 billion U.S. dollars, said Xu Qiang, head of the municipal foreign trade committee.

Hyundai Motor Group said last month it will build a fourth China plant in Chongqing. A number of foreign investment projects are in discussion in Chongqing and "the amount of actual foreign investment will increase remarkably in the second half of this year," he told Xinhua.

Chongqing's foreign trade in the first quarter grew 82.3 percent year on year to reach 131.8 billion yuan, with exports expanding 61 percent.

"The speed of economic development may slow down, but driving forces remain and show good prospects," said Xu.

Besides the comprehensive reforms, Chinese leadership has put forward ideas such as the Silk Road economic belt and the coordinated development of Beijing, Tianjin and Hebei.

Consumption by China's huge aging population and the country's environmental protection-related industries are also promising sectors for driving economic growth.