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China's economy expected to slow in coming years

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BEIJING, Sept. 28 (Xinhua) -- China's economy will continue to slow in the coming five years, with an expected average annual growth rate of 8 percent, said a senior official on Wednesday.

Lu Zhongyuan, vice president of the Development Research Center of the State Council, or the Cabinet, said at a press briefing that this year's slowdown to 9 percent was consistent with macro-control policies, which helped inflation management, economic restructuring, energy saving and emission reductions.

From January to September this year, the economy continued to grow at 9 percent, Lu said, adding that annual growth was expected to be higher.

"This will strongly support the recovery of world economy and efforts to avoid a double dip recession," Lu noted.

Slower growth rates will actually help China to contain rising prices and readjust the country's economic structure, as well as improve energy consumption and emission reduction, he said.

And concerns of China's economy having a hard-landing were overblown, he said, stating that recent slowdowns in China's economic growth were within the "normal range."

The Chinese economy grows by 9 to 10 percent each year on average, with a normal fluctuation range between 8 and 12 percent in the past 30 years.

"We envision that household spending will increase and urban-rural income gap will narrow. If the restructuring progress goes well, we expect to see rising service sectors, declining energy intensity and carbon emission...." he said.

More priority should be given to the quality and stainability of growth and allowing the Chinese people to benefit more from the growth, said Lu.

China's economic potential is propped up by a set of positive factors, he said, such as the accelerating industrialization and urbanization, expanding household spending and robust investment and consumption.

Meanwhile, liquidity has turned from shortage to relevantly abundant and the advantage of overall huge amount supply of labor forces will remain for a period of time.

But he warned the climbing costs of labor, land and other resources, coupled with the aging population, will undermine the country's traditional competitive edge of low costs.

The Chinese economy still faces multiple challenges and uncertain factors, such the uncertainty of the U.S. and European economic recoveries, rising inflation pressures, emerging financial risks of local governments and tightening monetary policies for the small and micro enterprises, he said.

The macro-control policies should continue next year but they need to be more targeted and flexible, he noted.

He also called for expanding policies aimed at encouraging household consumption, improving investment structure and improving environment for small and micro enterprises to collect money.

Efforts should also focus on stabilizing and improving the structure for international trade and outbound investment, Lu said.

Under the current situation, China's economy must maintain an "appropriate and reasonable" growth rate, Lu said, adding that it has become more difficult for the country to maintain a growth rate around 9 to 10 percent in the long run.

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