Infosys China's CEO optimistic on China's economy

Rangarajan Vellamore, CEO of Infosys China. [Photo/China Daily]

Editor's note: The first quarter of 2015 is the beginning of China's "new normal" economy, meaning the nation is moving toward a slower, but more sustainable growth rate.

During the first three months, China's economic growth fell to a six-year low of 7 percent, buffeted by sharp declines in industrial production and real estate construction. Meanwhile, fixed-asset investment growth dipped to a historic low of 13.5 percent, compared with the average of 15.7 percent last year.

In March, China's industrial output growth dropped to a post-crisis low of 5.6 percent, down from 6.8 percent in the first two months of the year and from 7.9 percent in December. Year-on-year retail sales growth in March slowed to 10.2 percent, the lowest level since March 2006, compared with 10.7 percent in the first two months.

China Daily asked a cross-section of senior executives from a variety of multinational companies with operations in China to offer their thoughts on the "new normal" economy and their plans in the near future.

The answers from Rangarajan Vellamore, CEO of Infosys China. Infosys is India's second-biggest software services exporter.

Q1. Although the GDP growth rate has fallen to 7 percent in the first quarter from 7.3 percent in the fourth quarter last year, the dip has not surprised the market. Some analysts have said the drop in growth rate is good for structural adjustment and transformation. What's your view?

I believe there shouldn't be a drastic fall in GDP growth. If the growth rate is stabilized gradually, it is fine. Progress in structural change to increase domestic consumption and increase in domestic demand will be key for keeping momentum in economic progress.

Q2. In March Premier Li Keqiang announced a growth target of "around 7 percent" for 2014. Do you think the target is achievable, especially when both the global and domestic economy aren't picking up as fast as they should?

I am confident that the government will make the appropriate interventions with certain investment strategies to meet the growth target.

Q3. What are your biggest concerns regarding the economy?

As the Chinese economy undergoes this transformation, they should avoid disruption to existing industries.

Q4. With construction and manufacturing sectors experiencing a slowdown, what are some of the major growth drivers the government should focus on to help boost the economy?

The services sector and a boost from retail consumption will be growth drivers.

Q5 Instead of solely focusing on GDP numbers, the government is now looking at sustainable growth. Do you think with the focus shifting, China will see a more substantive, all-round development?

Definitely. As China has achieved good scale, it must focus on quality of growth.