China’s new growth numbers are “disappointmenting” and the country is in need of an overhaul, according to the country’s leading economists.
The new data, released on Thursday by the Ministry of Commerce, showed a 2.3 per cent decline in growth in 2016-17 compared with the previous year, as the country struggled to contain the massive effects of the pandemic.
But China’s economy still has an output gap of about US$1.3 trillion and growth is expected to slow to a mere 1.7 per cent this year from 1.8 per cent last year, said Li Xiaolai, a professor at Renmin University of China.
“We are in a very fragile state.
We cannot keep the current growth rate for the next two years, or we will face a long period of weak growth and inflation,” he told reporters on Thursday.
China’s economy is still recovering from the pandemics pandemic and the recent slowdown, but the economy is now in a “weak state”, he said.
In the coming months, the country will focus on strengthening the economy in sectors such as energy, finance, insurance and health, he said, adding that China has a high level of risk.
With a low risk appetite, China’s growth is not likely to recover as fast as expected, Li said.
In the meantime, China needs to focus on building a strong manufacturing base, boosting the value added and creating more jobs, he added.
Although China’s economic growth has slowed, the government is “ready to take all the necessary measures to tackle this problem,” Li said, noting that it has been doing “everything to strengthen the country” and “make it more resilient”.
China has been the world’s second-largest economy after the United States and is the world leader in manufacturing.
It is now struggling to stem the damage caused by the pandems pandemic, which has hit the economy hard and is expected for another six to eight months.
Its central bank has been trying to rein in inflation, and is looking to cut interest rates.
However, some analysts think the central bank may be overly cautious in trying to cut rates.
China has also been struggling to rein itself from the global financial crisis and the slump in global growth.
Many economists think that China will still be in recession until 2017-18, though China’s slowdown may not last as long as some economists predict.