China's economic fundamentals remain stable: central bank official

HONG KONG - The fundamentals of the Chinese economy remain stable and promising in the long run despite short-term challenges, a Chinese central bank official said here Tuesday.

Zhang Qingsong, deputy governor of the People's Bank of China (PBOC), China's central bank, made the remarks at Hong Kong's second Global Financial Leaders' Investment Summit while addressing the concerns of some global investors over the Chinese economy.

"You may ask me, are you worried? No, not always, not too much," he said, pointing to China's large working-age population and rapid growth in research and development investment as key driving forces for growth.

He said that his evaluations of the current economic performance are placed in the long-run framework, and he prefers to leave the market forces to play their roles and make only necessary policy adjustments as long as short-term indicators have not significantly deviated from the long-term trend.

Looking back upon China's economic and social development over the past 40-plus years, all the important goals China set for itself have been achieved, despite the highly complex internal and external environment, he said.

Noting that the Chinese economy is facing some pressure and challenges this year, Zhang said that in general, the economy is resilient and dynamic, with picked-up recovery momentum in the third quarter.

China's economy expanded 5.2 percent in the first three quarters of this year, with indicators ranging from industrial production and retail sales to an improvement in residents' income, official data showed.

Zhang addressed some of the key concerns of global investors, including the local government debt issue as well as the property sector. He said that the overall debt level of the Chinese government is in the middle to lower range by international standards, and local government debt is a "structural issue," as most debts are issued by governments in the eastern and central provinces where the size and growth of economic output outperform others.

As for the property market, Zhang said that certain correction is normal, but it is necessary to carefully manage its pace to avoid sharp downturns and unintended consequences, adding that the government has rolled out many policies to stabilize the property market this year.

In the long run, China still has much room for urbanization, fueling housing demand, he said, adding that he is quite optimistic about the future of China's property market.

Hong Kong's second Global Financial Leaders' Investment Summit is held under the theme "Living with Complexity", from Nov 6 to 8.