Why we should not look at Chinese economy with neither extreme optimism nor pessimism

Mar 08, 2016, 09:00 am

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By Hong Soon-do, Beijing correspondent, AsiaToday - China's economy is not sailing downwind unlike the beginning of last year. And this year could be even tougher. This is why some of international think-tanks warn that China's economy faces risk of hard landing.

Nevertheless, we should not be extremely pessimistic about the Chinese economy considering the atmosphere of the China's so-called the 'two sessions' that kicked off in Beijing on March 3. The 'two sessions' are the annual plenary sessions of the National People's Congress (NPC) and the National Committee of the Chinese People's Political Consultative Conference (CPPCC). There are many reasons why we should not take an extreme pessimistic view of the Chinese economy, according to the March 7th reports of Xinhua News Agency and other state-run outlets. Most of all, we can see it from Chinese Premier Li Keqiang's confidence towards the economy as he delivered the Work Report 2016 during the opening session of the National People's Congress (NPC) on March 5. He set the national growth target at a range of 6.5 percent to 7 percent this year, and average annual growth of above 6.5 percent for the next five years, naming several data. He said that China can build a Xiaokang society in all respects by 2020. The term "Xiaokang" is used to refer a society people have a shelter, more than enough food and clothing, and lead a well-off life. He did not forget to confidently mention that China will achieve its centenary goal. He would have not said that if he was worried about China's risk of hard landing.

A propaganda poster of Chineseauthorities stressing that the Chinese economy will keep seeking a stablegrowth in the future. It can be seen as the state's efforts to evaluate itseconomy optimistically despite being in tough economic times./ Source fromXinhua News Agency

The statements by Xu Shaoshi, who heads the National Development and Reform Commission(NDRC), regarding China's economy at the press conferences of the two sessions on March 3 and 6 can be seen in the same vein. Easing concern about China's growth prospects, Xu said, "I can say that the Chinese economy will absolutely not have a hard landing." He said that the Chinese economy's fundamentals are not simple ones and that the state's 'new normal' policy will be going smoothly. He also emphasized the positive side of the economy, revealing that foreign investment increased last year and it won't decrease dramatically this year.

Of course, pessimistic views of China's economy are not illogical at all. Premier Li showed confidence but at the same time, he mentioned the middle income trap, proving that the Chinese economy is facing a tough situation. In addition, the NPC deputies and members of CPPCC National Committee who attended the sessions looked quite depressed on average, representing such atmosphere. Moreover, several latest economic indicators are telling the Chinese economy will face a tougher situation. This is why we should look at the Chinese economy with neither extreme optimism nor pessimism.  

#Chinese economy #two sessions #hard landing #Li Keqiang #Xiaokang 
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