China needs to move decisively in implementing the reforms in 2015

Editor's note: This year's economic expansion is widely expected to be the slowest in many years, and the central leadership envisions a "new normal" for the pace GDP growth and its structure going forward. What will unfold in 2015 - sustained, rapid expansion or an orderly transition to slower growth? China Daily asked a group of economists and analysts on their expectations for the economy in 2015.

TOM RAFFERTY, ECONOMIST FOR ASIA AT THE ECONOMIST INTELLGENCE UNIT

What is the most likely outcome for China's economy next year-sustained, rapid expansion or an orderly transition to slower growth?

Few analysts expect China's economy to grow at a rapid rate in 2015, which we would define as more than 8 percent. The debate is really about whether China's economy will expand at about 7 percent, a reasonably rapid pace, or enter a period of much lower growth. Earlier this year, there were many suggestions that the Chinese economy was heading for a hard landing, but the consensus view at the moment appears to be that growth of about 7 percent will be achievable next year. However, there are questions about whether China will be able to maintain that pace of growth in the medium term.

What is the most important indicator that observers should use when judging whether a transition has taken place? How can China achieve the goal implied by that indicator?

We would caution against inferring too much from the GDP numbers. Perhaps the clearest indicator about how content the government is with a slower pace of economic growth will come when it announces next year's economic growth target. If it chooses the same target as this year of "around 7.5 percent", it will be a clear sign that it is uncomfortable with weaker economic growth. The continued setting of high growth targets only reinforces dependence on short-term monetary and fiscal loosening.

What is the biggest concern for the Chinese economy in 2015? How can China address that concern?

Our concern is that the reform agenda gets sidetracked by the economic slowdown. The government needs to move decisively in terms of implementing the reforms it has promised in 2015 - now that the groundwork has been laid - if they are to yield dividends for the economy in the medium term. We will be looking particularly closely for more details on the reform of State-owned enterprises.

What is the most resilient part of China's economy? How can China best utilize its strengths in this area?

Consumer spending has proved resilient, despite headwinds from the ongoing anti-corruption and anti-extravagance campaign, the troubled real estate sector and falling corporate profitability. We hope that this reflects the beginning of a process of redistributing wealth to households from the corporate and government sectors. Consumer spending ought to remain strong if the central authorities can continue to expand the social welfare net and eliminate distortions in the financial sector.