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China to remain driver of global growth in 2016

Updated: Jan 18,2016 2:12 PM

China’s slowing GDP growth has been the heated focus of global attention and discussion.

An AFP survey of 18 economists on Jan 17 showed that the median forecast indicated gross domestic product (GDP) would expand 6.9 percent in 2015, the lowest in 25 years. The National Bureau of Statistics (NBS) will release the official GDP figures on Jan 19. The report also said that the median forecast of China’s GDP growth in 2016 is 6.7 percent, and worries about the economy’s health had triggered global stock market volatility.

Ding Yifan, a research fellow with the Institute of World Development at the Development Research Center of the State Council said since the financial crisis in 2008, China had been the main locomotive of the world economy and it contributed more than 50 percent of global growth. Even now China’s contribution was still above 30 percent.

The Chinese economy is the focus of so much attention, Ding explained, because maybe the world thinks it is the “only hope’’.

In actual fact, Ding said, dollar appreciation was a key reason for international market turbulence.

For example, with the falling oil price and China has taken the opportunity to expand its oil reserves and while import volumes hit a new record the oil price still kept falling, Ding said.

Russian Economic Development Minister Aleksey Ulyukayev said in an interview aired by the Rossiya-24 TV news channel on Jan 17, that China is experiencing an economic transition.

China’s growth rate is still much higher than most countries despite the slowdown. While attending the launch ceremony of the Asian Infrastructure Investment Bank on Jan 16, Premier Li Keqiang said that China’s GDP in 2015 passed $10 trillion, according to Reuters. Half of that came from the service industry and consumption accounted for nearly 60 percent of GDP.

By most accounts, China is likely to remain the single biggest driver of global growth in 2016, a report in the Los Angeles Times said on Jan 14.

Most economists agree that fears of a meltdown in China triggering a sharp global downturn are overblown, it said.

China’s slowdown, after years of double-digit growth, reflects the nation’s attempt to create a more diversified and sustainable economy. And in some important ways, China is better positioned to make the difficult transition from exports and investments to a consumer-driven service economy than other Asian economies that have attempted to do so, it said.