China's growth will moderate amid structural transformation: World Bank report

Updated 2017-04-14 09:30:56 Global Times

The outlook for the Chinese economy is one of a gradual transition to slower growth as it rebalances toward consumption and services, the World Bank said in its latest report on Thursday.

The report forecast China's GDP growth rate at 6.5 percent in 2017 and 6.3 percent in 2018, unchanged from its previous report released in October, 2016.

In China, economic growth will continue to moderate, reflecting the impact of the government's measures to reduce excess capacity and credit expansion, leading to the cooling of the real estate sector, the report noted.

The outlook for developing countries in East Asia, including China, will remain broadly positive in the next three years, driven by robust domestic demand and a gradual recovery in the global economy and commodity prices.

"Sound policies and a gradual pickup in global economic prospects have helped developing East Asia and the Pacific sustain growth and reduce poverty," said Victoria Kwakwa, World Bank vice president for East Asia and the Pacific.

The report said that the region faces potential risks stemming from protectionist policies in some developed economies, as well as US interest rate hikes.

For China, the government should continue to pursue economic reform by reducing excess industrial capacity and improving social transfers and labor policies, the report recommended.

Also, China's State-owned enterprises' restructuring and debt reduction should be on the agenda of the government, as well as tightening the regulation of shadow banking and addressing rising household mortgage debt.

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