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Argentine experts say China’s solid economy ready to tackle reforms in 2017

Updated: Jan 18,2017 9:10 AM     Xinhua

BUENOS AIRES — China’s 2016 economic performance showed itself to be solid enough to tackle a series of dynamic reforms in 2017, maintaining its role as an engine of global growth, two leading Argentinian experts have said.

Structural reforms were set in motion last year, as part of China’s new Five Year Plan, which will ultimately “improve the welfare” of the Chinese people, Nadia Radulovich and Maria Cecilia Peralta, co-founders of Argentine consulting group Asia Viewers, told Xinhua in a recent interview.

Peralta said China’s economy “showed solid growth, with a growth rate of 6.7 percent in the first three quarters of 2016.”

The consultants said they expect fourth-quarter results, to be announced soon, will show a similar performance, with a current account surplus and enormous foreign reserves.

Achieving the target growth rate of 6.5 percent to 7 percent “will surely entail very dynamic adjustments in various policies” designed “to balance aggregate domestic demand with external demand, and to adapt the aggregate supply in a global context marked by uncertainty, including doubts about the direction to be taken by the United States,” said Peralta.

Over the next few years, Radulovich suggested, China should center its policies on the “process of industrial reconversion, investing in innovation to further that process, and the restructuring of state companies.”

Investment in infrastructure will be a focal point as the trend towards urbanization picks up.

Cities with great infrastructure works, under the concept of green and technological cities, will be the premise of this new urbanization, which is expected to have a marked impact on the real economy, said the consultants.

Foreign direct investment and the inflow of capital will be another focus for the Chinese government, not just due to competitiveness, but also due to the monetary stability needed for the internationalization of the country’s currency, they said.

Without doubt, 2017 will be a year of great economic challenges for China, as the country works to boost the productivity and efficiency of its companies, to improve social well-being and employment in accordance with the Five Year Plan, said the consultants.

According to the International Monetary Fund (IMF), China contributed 1.2 percent to global economic growth in 2016, in contrast to the United States, which contributed a scant 0.3 percent, and Europe, 0.2 percent.