— Basic condition remains unchanged, with potential for stable growth

With the announcement of various economic statistics in May, indicators of sluggishness in the Chinese economy are triggering widespread concerns. Some foreign investment banks and agencies have lowered their forecasts on Chinese economic growth. In response, many experts say the basic situation of the Chinese economy has seen no fundamental changes. China's economy used to grow at a double-digit rate, and now it is slowing down to a moderate rate. However, this is a result of China's action to adjust economic structure. The Chinese economy will not "tumble" or "stall," as are the concerns of the outside world.

Economic Growth Slows, Yet Still Within Normal Range

In the first quarter of 2013, the growth rate of the Chinese economy saw another recession. In April and May, economic statistics also showed sluggishness. Particularly, the declining industrial growth rate adds to the concerns that the Chinese economy is malfunctioning. Several foreign investment banks, including Deutsche Bank, Standard Chartered Bank and ANZ Bank, have again lowered their forecasts on the Chinese economic growth for 2013, believing that it will slow down more rapidly than expected.

Zhu Baoliang, Deputy Director of the Economic Forecast Department of State Information Center, said the current economic growth rate is proper and people should not always expect China's economy to grow at a double-digital speed. In his opinion, the internal and external environment that has supported the Chinese economy's high growth in the past three decades has undergone great changes. Given the current 7-8 percent annual growth rate, the goal of doubling the economic aggregate of 2010 by 2020 is achievable and there will be no major pressure on China's employment. Besides, it will be more favorable for the economic structural adjustment.

Niu Li, Director of the Macroeconomic Research Office of the Economic Forecast Department under the State Information Center, believes this year's forecast on the Chinese economy's growth rate will be around 7.5 percent. In the first quarter, the economic growth rate reached 7.7 percent, notably higher than that of other countries. It is quite good on the whole. He said an 8 percent potential growth rate for the Chinese economy is quite proper. If it is significantly higher than 8 percent, it will pose pressure on resource demand and inflation, but if it is far lower than 8 percent, there will be many questions concerning the waste of resources, Niu said.

Great potential for moderate growth

It is believed that it's time for China to say farewell to the double-digit growth rate. To make the Chinese economy enter the stage of moderate-speed development through economic reforms and restructuring will be the path of the Chinese economy in the long term. Meanwhile, many favorable factors will contribute to the stable growth of the Chinese economy and thus there is great potential to be tapped.

According to Niu Li, the global economy has entered the period of readjustment after the outbreak of the global financial crisis. Given the fact that China's demographic dividend is diminishing and the contribution by capital to economic growth is weakening, China's economic growth rate is declining and entering a stage of moderate growth.

Wang Jun, Deputy Director of the Department of Consultancy of China Center for International Economic Exchanges, said the new leadership of the Chinese Government has taken the initiative to slow down the pace of economic growth and has become tolerant of slower growth. The growth rate of GDP will no longer be the top priority, but more attention is being paid to quality and efficiency of growth. Reforms and structural adjustments are expected to bring longer and more sustainable development.

Zheng Xinli, Vice President of China Center for International Economic Exchanges, also believes there still exists great potential in terms of consumption, tertiary industry, capital, land as well as scientific and technological innovation. As long as the potential is fully released through reforms, these favorable factors will be able to support a rapid and stable growth of the Chinese economy for the coming 10 and 20 years.

Enough space for policy adjustment

In order to realize the stable and rapid growth of the Chinese economy, there is still enough space for the government's follow-up reforms and controls. The issuing of these policies will ensure that the growth rate of the Chinese economy will not fall below a threshold that would be unbearable.

Niu Li believes the current fiscal, financial and currency policies remain relatively relaxed. The state's adoption of tax breaks and increasing inputs in people's livelihood will help to relieve enterprises of burdens, as well as guarantee and improve people's lives. The new government has launched a series of reforms to change the government's administrative functions, simplify bureaucracy and decentralize government power. These measures will surely further stimulate activities of microeconomic entities and thus is helpful in maintaining stable economic development.

How may a rebound in economic growth be produced? According to Zheng Xinli, in the long run, reforms should be carried out to release potential in various areas. In the short term, stabilizing economic growth should be taken as a priority. The upgrading of the economy will be a major measure to stabilize economic growth, including activating non-governmental investments, increasing supply of housing, adjusting consumption policies, increasing environmental inputs, pushing forward replacement of the business tax with a value-added tax, and reforming the financial system.

Upgrading the Chinese economy is a very clear task, said Zhang Liqun, Vice Secretary-General of the Academic Committee of the Development Research Center of the State Council. To fulfill this task, the first thing is to strengthen the competitiveness of economic systems and mechanisms. In response to profound changes in the market, we need to choose proper enterprises and industries. These things can't be guided by the government, but should depend on market guidance by fully bringing into play its competitive role.