The performance of the Chinese economy has been very impressive since the global financial crisis, a U.S. economist said in a recent interview with Xinhua.
Since the fourth quarter of 2008, average quarterly real GDP growth in China has been 8.2 percent year on year, while the equivalent figures for the United States and euro area are 1.4 percent and 0.4 percent, respectively, said Paul Sheard, executive vice president and chief economist of American financial information service provider, S&P Global.
China's high growth in the wake of the 2008 financial crash reflected its high economic growth potential and the strong growth momentum helped by its full-fledged entry into the global economic trading system in 2001, but it also reflected the very effective policy response to the shock of the crisis, the expert said.
"China quickly mobilized fiscal and monetary policies on a large scale when the crisis hit the developed world and China's major export markets. China successfully steered its economy away from reliance on external demand to more reliance on domestic demand, particularly infrastructure investment," Sheard said.
The massive infrastructure investments by China served several purposes simultaneously: keeping the Chinese economy from negative effects of the crash, helping to correct unsustainable macroeconomic imbalances, and accelerating the accumulation of the urban and transportation infrastructure contributing to China's continuing economic development.
However, China's post-crisis credit-fueled investment in infrastructure and residential housing also leads to a build-up of debt and credit in the economy. In this context, China's economic reforms are important.
"It is important that institutional and market-enhancing reforms continue to be implemented that create the right incentives for capital to be allocated efficiently, for economic enterprises to be well managed and for the necessary rebalancing of the economy to take place away from excessive reliance on investment and towards household consumption becoming the key driver of economic growth and rising living standards," said Sheard.
China's economy expanded 6.9 percent for the first half of 2017, with consumption and services, and new innovation-driven economic sectors taking up larger roles in the economy, data from the National Bureau of Statistics (NBS) showed.
China's economy has gone forward in a rapid pace since the financial crisis and has been a greatest contributor to the global economic growth.
"Global growth has been running in the low threes to three and a half percent range since then and we expect growth of about three and half percent to continue for the foreseeable future," Sheard said.
The economist expected the U.S. economy to continue to grow at a little above 2 percent, China in the mid-6 percent range, the euro area and the Britain at around 1.5 percent, and Japan at around 1 percent.