Outlook and expectations for China's economic growth

Dr. Xiaobing Wang, senior lecturer in China economics at the UK's University of Manchester spoke to CGTN Europe on China’s economy.

Transcript

00:00 Xiaoping Wang is a senior lecturer in Chinese economics at the University of Manchester.

00:05 The problem that the world is facing is very high inflation. So this is across the world

00:12 in the UK and in America as well. But in China we have this deflation. So on the positive

00:20 side we have a Chinese economy that is running very well, not being affected by inflation,

00:27 etc. that many countries have suffered. But we do not want an economy that has too much

00:33 deflation because that means that the economy may not be growing. That means that people

00:38 may not have enough confidence. So sometimes when you have too long deflation for too long

00:45 then we need to take actions as well.

00:48 So let's talk about that confidence because there's been plenty of news out this week

00:52 on moves to stabilise the markets in China, including the appointment of a new securities

00:57 chief. So how is the mood amongst investors changing?

01:02 The mood among investors has been low for a while, especially when we experience the

01:07 lowest stock markets for a while. Yet this is partly due to some factors, temporary factors,

01:16 for example real estate bubbles. But we also have some structural problems that China is

01:23 facing, for example population ageing. But the government has been doing a lot trying

01:29 to change this mood. For example the appointment of a new securities chief is one of these

01:36 efforts. But we need to do more in order to increase the confidence of the investors.

01:43 I mean not only government has to do more, but government should allow the market to

01:49 do a little bit more. So basically let market do its things. So when market operates, it

01:57 will sort out some stuff themselves. One thing, government has to be very effective and to

02:03 be active in certain areas, but on some areas government has to sort of recede a little

02:08 bit to say, "OK, can we allow markets to function?"

02:14 Let's have a look and see where growth is going to come from. Because there tends to

02:18 be a flurry in economic activity at this time of year because of the Spring Festival, the

02:22 travel and the celebrations around it. Does that skew your outlook and expectations for

02:28 China's economic growth?

02:30 Yes, it will definitely skew the economic statistics a little bit due to this festival

02:35 season because normally factories will have a break of half a month, not all the factories

02:41 but some factories will do. So in that case, it will shift export data and also the domestic

02:49 growth data a little bit. This has happened not only this year but for many years as well.

02:57 But we should also look at the fundamental structural problems China is facing because

03:03 sometimes short-circle fluctuations matters, but sometimes the long-run economic trend

03:11 also matters. So we have to care about both, not just say, "Oh, this is a short fluctuation."

03:17 So we have to think about the long-run fundamental problems. And only when we solve those fundamental

03:24 problems we can actually generate genuine, meaningful economic growth.