BEIJING (Reuters) - China is entering a new stage of stable economic growth that may last for a decade, a government adviser said on Thursday, dismissing talk of the start of a new round of robust growth, as the real estate industry is expected to continue to cool.
“We have had initial proof that the economy has bottomed out and may be entering a new period of steady growth, thanks to more stabilized final demand,” said Liu Shijin, vice-chairman of state think-tank the China Development Research Foundation.
The economy has now escaped the slowing trajectory of the past seven years, Liu told an economic forum in Beijing, predicting the new medium-speed new stage would probably last for about ten years, going by the example of Western nations.
China’s economic growth of 6.7 percent in 2016 was its slowest pace in 26 years.
Liu dismissed growing rhetoric that China is entering a new economic cycle of strongly rebounding growth, after having recorded a better-than-expected increase of 6.9 percent in gross domestic product (GDP) in the first two quarters.
“I don’t think such a new cycle exists,” he said, stressing that a surprise pick-up in real estate investment - a major driver of economic growth in China - in 2016 did not reverse a slowing trend following its 2013 peak.
He expected growth in the sector to slow to a new normal of about 2 percent in the second half this year, adding, “It should not be seen as abnormal if there is no growth or negative growth.”
Real estate investment in China grew 6.9 percent in 2016, official data showed.
Reporting by Yawen Chen and Ryan Woo; Editing by Clarence Fernandez