Growth slowdown not prelude of recession: expert

BEIJING - A further slowdown of China's economic growth seems inevitable, said Li Yang, vice head of the Chinese Academy of Social Sciences (CASS), on Friday, but it should not be treated as the precursor to a recession.

The growth rate slowed to 7.4 percent in 2014, its weakest annual expansion in 24 years, and a string of economic indicators, including manufacturing and trade data, all suggest continued weakness.

The Chinese economy "has entered a new normal", which will last for a long time, said Li Yang, when attending a two-day forum on the "Chinese economic situation" that opened in Beijing on Friday.

He said that it was misleading for some to interpret the situation as recession.

"The economy should be observed from at least three levels," said Li Yang, naming the levels to be quantity, quality and reform progress.

Despite a dip in the quantity level growth rate, Li Yang argued that the economy had improved growth quality and deepened reforms.

In 2014, the value added of the tertiary industry in China grew 8.1 percent year on year, 0.8 percentage points faster than secondary industry, Li quoted from a report by the National Bureau of Statistics, which was released Thursday.

"This is a significant change given that one of China's restructuring targets is to increase the proportion of the tertiary industry," said Li Yang, noting that a "precondition" was to make the tertiary industry's growth speed surpass the secondary industry.

"We made it in 2014," he said.

Consumption volume last year accounted for 51.2 percent of GDP growth, 4 percentage points more than investment.

The change reflected positively on efforts to shift economic growth away from exports and investment toward domestic consumption, according to Li Yang.

Further, the gap of residents' per capita disposable income between urban and rural areas was tightened last year. The per capita net income of urban residents expanded 9 percent year on year to 28,844 yuan (4,692 U.S. dollars) while their rural counterparts' income rose 11.2 percent to 10,489 yuan.

The per capita GDP carbon dioxide consumption was down more than 5 percent last year, exceeding expectations of a 1 percent drop.

In addition, Li Yang pointed out, more than 300 administrative approval items were reviewed to create a favorable trade environment.

Thus, he said, 7.4 percent GDP growth and 2 percent CPI expansion was "perfect" for the economy

The consumer price index (CPI), the main gauge of inflation, rose 2 percent year on year, below the government's target of 3.5 percent.