Chinese economy set to turn around, no hard landing: finance minister

Sun Jul 21, 2013 4:43am EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

SHANGHAI (Reuters) - China's finance minister denied that the world's second-largest economy was entering a crisis period, adding that he believed growth could even accelerate, as quoted by the official Xinhua news service in an interview.

The report quoted Lou Jiwei, speaking on the sidelines of the G20 conference on Saturday, saying he expected China's economic growth to end the year at 7.5 percent, the official target rate.

A Xinhua report on July 12 that quoted him saying he expected growth to come in at 7 percent caused brief market confusion, but Xinhua later changed the report to quote him as saying 7.5 percent.

"We see domestic power generation and electricity consumption increased by 4 percent, and the service industry's usage of electricity increased 8 percent," Lou said, arguing that the increases showed efforts to shift China's economy towards services from manufacturing were bearing fruit.

"None of my fellow delegates think China is going to have a hard landing."

The interview was published late on Saturday, a day after Beijing announced it would remove the floor under bank lending rates in a move to free up interest rates, which planners hope will put China's economy on a more sustainable growth path.

Lou said China would continue tax reforms to promote growth, in particular by converting sales taxes to value-added taxes (VAT), while cutting down on paperwork and application requirements for Chinese businesses.

His views were more mixed on the country's real estate industry, which regulators and economists fear is distorted by speculation and fuels inflation.

The industry should play a "normal" role in economic development, he said, adding that its place in China's urbanization project required further study.   Continued...

 
Chinese Minister of Finance Lou Jiwei smiles before the G20 finance ministers and central bank governors family photo during 2013 Spring Meeting of the International Monetary Fund and World Bank in Washington, April 19, 2013. REUTERS/Yuri Gripas