Doom-mongers get it wrong on China's economy

Updated 2016-12-28 09:23:10 Xinhua

The doom-mongers continue to get it wrong on the Chinese economy, time and time again.

There were frustrations when the world's second largest economy shifted gear to allow for structural reforms, but many of the doomsday scenarios predicted -- total economic collapse, a local debt meltdown, a burst property bubble, the yuan in freefall -- were a step too far and, as ever, wide of the mark.

There has also been a lot of finger-pointing, alleging that China has dragged down the world economy. Blame has been piled on China for the uphill struggles facing troubled industries worldwide.

Here is a list of scare-mongering proved wrong by the realities of the Chinese economy in 2016.

A HARD LANDING

The same old predictions about China's economy suffering a hard landing provide perfect fodder for media sensation year after year, especially amid the country's recent economic slowdown.

However, they were all proved false alarms, as shown by the economy's steady growth of 6.7 percent in the first three quarters, within the government's annual target range of 6.5 to 7 percent, and the envy of most other countries.

China has not only made a hard landing near-impossible, but also taken strides in lifting the quality of its economy, evident from the bigger contribution made by consumption and services in the economy.

By steering the economy on a quality and sustainable path, the country will secure a smooth transition to a medium-high level of growth and avoid a hard landing, much to the disappointment of the China bears.

YUAN TUMBLING OUT OF CONTROL

Persistent weakness in the yuan at the beginning of 2016 fueled concerns that China's policymakers might have lost control of the currency, which would tumble in the year.

Although the yuan weakened about 7 percent against a strong U.S. dollar, it remained relatively stable against a basket of currencies and even gained value against some major currencies.

For the year ahead, China plans to "keep the yuan basically stable, while improving the flexibility of exchange rates."

It believes that despite short-term fluctuations, the yuan will maintain overall stability, and the chance for a sharp depreciation can be ruled out, backed by China's stable economic growth, balanced fiscal conditions and ample foreign exchange reserves.

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