China is getting rid of economic shift panic

By Lu Yanan from People’s Daily

China-Economic-GrowthThe Lantern Festival was over, but Guizhou Province native Chen Yu had no intention of returning to the box factory in Foshan, Guangdong Province where he had worked.

“My boss declared before the Spring Festival that business was slack and he had to close the factory,” said Chen, who decided to try his luck in Guiyang, capital of Guizhou Province. “Many factories are in recession, and many of my fellow-townsmen have gone back home.”

Chen’s experience is an epitome of the Chinese economy in the new normal era. “Economic growth shift” is considered the most prominent characteristic of the new economic pattern in China.

Statistics released on Wednesday by China’s National Bureau of Statistics showed that China’s national economy in the first two months of 2015 was confronted with increasing downward pressure, a trend that had been going on since the beginning of last year.

In January and February, China’s industrial use of electricity increased only 1.6 percent year-on-year, which was 1.1 percent lower than the growth rate of total electricity consumption. The above scale industry increase value grew 6.8 percent year-on-year. The growth rate was 1.1 percent lower than that in December 2014, and was the lowest on record since 2010.

A sustained slowdown in China’s economic growth has triggered panic in many local governments. “Many people have illusions about China’s economic figures at the current stage,” said Liu Shijin, an associate director at the Development Research Centre of the State Council.

Liu said that many people were anxious about or even frightened by China’s economic prospects, because China’s actual economic growth rate has dropped a few percentage points from the double-digit growth rate of the past 10 years. But actually China’s aggregate economic volume base has grown larger. A slowdown in economic growth is the normal result of economic rules.

 “In 2015, a 2-3 percentage points growth in China’s economy is equal to 10 percentage points’ growth in 2000. Therefore, even though the economic growth slows down, the economic value represented by each percentage point is much larger than before,” Liu said.

“We can’t do without GDP, because GDP is directly linked to government revenue and public welfare improvement,” said Li Zaiyong, Party secretary of Liupanshui city, Guizhou Province. Each percentage point growth in Liupanshui’s GDP represents 10 billion yuan value of output and about 900 million yuan of government revenue.

They cover a wide range of expenditures in sectors such as education, medical health and public transportation. “However, we can’t worship GDP,” Li said. “It’s unscientific and unsustainable if we measure development only by economic growth rate. We should abide by the new normal regulations and take comprehensive development in areas of economy, culture, politics and ecological environment, into consideration. We should seek a GDP that is green, low-carbon, efficient and high-quality. Thus, we may find hope.”

The factory worker Chen is not worried about getting a new job. “There are so many places looking for employees. Restaurants, hair salons, neighborhoods, housekeeping companies… I don’t have to seek a job in a factory.”

“China’s economic structure is undergoing profound changes in a period of differentiation and transformation. The active elements supporting stable economic growth are also collecting. We should not struggle with the growth rate problem,” said Ma Jiantang, director of the National Bureau of Statistics.

In the past two months, the production index in China’s service sector has grown 7.4 percent year-on-year, 0.6 of a percentage point higher than the growth rate of the above scale industry increase value in the corresponding period.

Particularly, the retail sales of China’s online commodities and services have increased 44.6 percent year-on-year. Also, the growth is significant in certain areas such as the Internet and the culture industry. “China’s economy is seeing new markets, new business formats and new driving forces. There is an evident transformation tendency in China’s economic development forces, ” Ma said. (People’s Daily)