China could sustain 6% growth rate in medium term: US expert

NEW YORK — Chinese economy could sustain current growth rate of over 6 percent for the foreseeable future, a US expert has said.

"The growth rate has come down from the previous eight or 10 percent, but that is still a very healthy rate and that should be the envy of any other country in the world," Farok Contractor, a distinguished professor at Rutgers Business School, told Xinhua on Tuesday.

Significant achievements

Contractor noted that China has made enormous progresses in economic development for the past five years, highlighting poverty reduction and RMB internationalization.

"Today there are only about 50 million Chinese left in grinding poverty, according to the World Bank's criterion, so that's a wonderful accomplishment not just for China but for the whole world," he said.

Having visited China for many times, the professor noticed that income inequality in the country is being addressed, and that "more attention is being paid to relatively poor provinces like Guizhou."

"There has been a more balanced distribution of benefits and more balanced growth," he added.

In terms of finance, the expert lauded China's continuous efforts in liberalizing its foreign exchange market.

He pointed out that one of the related achievements is the "inclusion of the Chinese RMB into the IMF's SDR basket, which is putting it on the path to becoming a recognized internationally tradable currency."

Sustainable growth

Rather than adopting large-scale stimulus, China has been intensifying efforts to shift the economy towards consumption, services and innovation.

The expert believed such structural reform could help the country to maintain a more sustainable growth rate.

"I think China will continue the 6-percent growth rate for the foreseeable future, because the population is over 1.3 billion... there are more and more people coming out of the lower middle class into the middle class status," said Contractor.

"Encouraging the consumption of the lower middle-class will give a stimulus or boost to the Chinese domestic economy," he added.

Moreover, he was also optimistic about the prospect of innovation in China.

"China is emerging as a research and development (R&D) center and there is a prospect of a few cutting-edge technologies, especially in biotechnology or in solar where China can become a leading contributor to the development," he said.

China's economy expanded 6.9 percent in the first half of 2017, with consumption and services, and new innovation-driven economic sectors taking up larger roles, according to data from the National Bureau of Statistics.

The International Monetary Fund (IMF) on Tuesday expected the Chinese economy to grow 6.8 percent this year and 6.5 percent next year, both 0.1 percentage point higher than its previous forecast in July.

According to the IMF, the upward revision to the 2017 forecast reflects "the stronger-than-expected outturn in the first half of the year underpinned by previous policy easing and supply-side reforms."

"There have been a lot of achievements in economic management in China... I would say that the 6 percent path the China is on will be sustained for quite some time now," Contractor said.