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Nusa Dua, Indonesia (AFP) Oct 07, 2013
China's economy is on a smooth and controlled slowdown, President Xi Jinping said on Monday, emphasising there was no reason to fear a hard landing.
"The change... has on the whole been smooth," Xi told an Asia-Pacific business forum, after detailing the slowing of the world's second biggest economy from 2011.
"Nothing has come as a surprise... the slowdown of the Chinese economy is an intended result of our own regulatory initiatives."
Xi acknowledged that there had been concerns around the world about China's economy, after growth slid from 9.3 percent in 2011 to 7.6 percent in the first half of this year.
"Some wondered whether there will be a hard landing, whether sustained healthy growth was still possible, how China will deal with the situation and what impact this will have on the Asia-Pacific," he said.
"I wish to emphasise that based on a comprehensive analysis of all factors, I am fully confident about the future of China's economy."
He said China's current expansion was "within the reasonable and expected range", while emphasising that even the slower growth experienced this year was still an enviable performance.
"In fact the growth rate of 7.6 percent makes the Chinese economy the fastest-growing among major economies," he said.
Xi said economic planners were prepared to accept lower growth numbers to ensure a more sustainable model.
"To fundamentally ensure long-term economic development, China has to press ahead with structural reforms even if this means some sacrifice of economic growth," he said.
He described China's economic reform as having "entered the deep water zone where tough challenges must be met".
Among the reforms that still needed to be undertaken, Xi cited giving the market greater freedom.
"We will continue to reform the administration system, transform the functions of the government, streamline government and delegate powers in order to... let the market play its role in allocating resources to a greater degree," he said.
Xi repeated the government's mid-term targets of achieving 7.0 percent annual growth up to 2020, during which GDP and per capita income would double from 2010 levels.
The Asian Development Bank this month lowered its growth forecasts for the region, citing the sluggish Chinese engine as a key reason.
The ADB projected regional gross domestic product to grow six percent this year, compared with its earlier forecast of 6.6 percent.
The bank cut its 2013 forecast for China to 7.6 percent, well down from its April estimate of 8.2 percent. It blamed weaker domestic demand, a softening industrial rebound and a sharp downturn in foreign trade.
But in a statement accompanying the bank's analysis, ADB chief economist Changyong Rhee also emphasised China's slowdown was due to a deliberate plan to build more sustainable foundations.
"Moderating growth in the People's Republic of China is the price of structural reform as authorities engineer a medium-term transition to a more sustainable growth path than one led by exports and investment," Rhee said.
"However this growth deceleration could impact the rest of Asia... since the PRC's economic influence has grown in the past decade."
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