China predicted to keep 8% growth in 2013

China’s GDP grew 7.8% in 2012, that’s 0.3% higher than the original target. And the consensus among economists is that despite challenges ahead, the Chinese economy is likely to grow at its potential level of around 8% for 2013. 

It’s China’s worst annual performance in 13 years as growth for the whole of 2012 came in at 7.8%.

But considering the various headwinds the country faced home and abroad, it is already a surprise on the upside.

Ma Jiantang, Director of National Bureau of Statistics, said, "There are still imbalances within the Chinese economy needing to be addressed. However, from a long-term point of view, the factors that had been driving the growth of the economy haven’t changed. So despite challenges ahead, we also have conditions working in our favor."

And one of the favorable conditions is ever growing domestic consumption. According to the NBS, final consumption accounted for 51.8% of China’s GDP in 2012. Experts say, consumption will remain a key driver behind China’s economic growth in the following year.

Zhengt Xinli, Deputy Director of Economic Committee of CPPCC, said, "There’s still a lot of potential left in boosting consumption. Through adjusting the structure of income distribution, encouraging residents to spend, and increasing spending on public services, it’s likely to see another 10% increase in consumption."

Government investment has been the shining knight in white armor whenever the economy struggles, but experts suggest to realize a long term and sustainable growth, the economy needs a more diverse range of nutrients.

Qu HongBin, Chief Economist, HSBC for Greater China, said, "Besides more consistent public investment to improve people’s living standards, there should also be more channels opened up for private capital investment from people."

As economic conditions in some of China’s biggest export markets such as the US, eurozone and Japan continue to remain fragile, experts say, China will have to look within for answers to keep its economy humming.

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