The probability that China’s economy will have a hard landing after years of double-digit growth is “small” said Bank of China’s Chief Economist, Dr Cao YuanZheng at a seminar organized by the EIB Institute.

A 7% growth rate in 2015 (compared to 9.3% in 2011) is necessary for China to avoid a hard landing and enter an era of “orderly, smooth and stable growth” he said. Dr Cao underlined the structural changes that China’s economy is currently undergoing: a shift from an export-led economy to an economy led by domestic-demand, competition from neighbouring countries with cheaper labour costs as wages increase in China, a rapidly aging society and the urgent need for energy saving and (carbon) emissions reduction.

For Dr Cao, reform is needed to perform structural adjustments that help create a stable growth and these adjustments are already underway. He mentioned the increasing weight of the service sector led by increasing domestic demand and technical improvements.

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