Davos (AsiaNews/Agencies) - As China's economy recovers
from a "soft landing", its big challenge this year will be to prevent
overheating whilst still promoting growth, said Fan Gang, head of China's
National Economic Research Institute, in his address to the World Economic
Forum in Davos, Switzerland, an organisation that focuses on world economic
For at least a decade, China has been a major focus
at the forum. With a growing economy and expanding industry, it has been an
engine of economic growth for other economies that depend on it for their own growth
However, results for the world's second largest
economy are lower than in previous years, posting growth of 7.8 per cent last
year, its weakest performance since the 1990s. In fact, manufacturing is down,
whilst a real estate bubble fuelled by government investments is creating
Still, things started to look up at the end of 2012
when fourth quarters figures showed faster growth than even Chinese leaders
"Now I can say the 'soft landing' has landed last
year, and now it's under way to recovery," Fan said. "This year China can grow
around 8 to 8.5 per cent, and that will lay down a good foundation for the next
couple of years". The challenge will be, he explained, to see how the central
government and the banking system can work together to maintain growth.
For him, 2013 could also be the year to start the
new round of financial, economic, regulatory and social reforms. The goal however
must not to allow added government spending to promote further heavy borrowing
and overheating of investments.
"The new leadership is now talking about reform and
reform and reform, and restructuring, restructuring and restructuring," he noted.
Ma Weihua, president and chief executive of China
Merchants Bank, was also at the forum.
In his view, domestic consumption holds the greatest
potential because it is still low in China-35 per cent compared with 70 per
cent in the United States. But, in his view, if the government wants to
increase spending it needs to address social security issues and income