7.5% GDP growth 'in reach' (3)

By CHEN JIA and ZHENG YANGPENG (China Daily)

09:53, August 01, 2013

The top leadership signaled only modest policy easing, preferably in the form of economic restructuring and reform, Yao said.

"Excess credit growth will still be contained and there will be no large-scale fiscal stimulus. One implication is that capacity consolidation may speed up so that resources and capital can be freed up from inefficient sectors."

According to a survey released on Wednesday by Netease Annual Economist Conference, 71.25 percent of China's economists are "cautiously optimistic" about the new leadership's reform determination, while 23.75 percent said they are "optimistic".

Half the number of economists surveyed said the largest problem for China's economy is "overcapacity", while the second largest concern, for about 24 percent of the respondents, is the existence of a property bubble. Nearly 65 percent said "average household income" should be the major indicator to measure realization of the "Chinese dream".

Yu Yongding, a former member of the Monetary Policy Committee of the People's Bank of China, warned at the conference that local government debt is an issue that policymakers should be "highly alert" to because the government actually "has no idea" of how large the debt exactly is.

Xu Shanda, former deputy director of the State Administration of Taxation, said at the conference he was glad to see the Political Bureau meeting held on Tuesday emphasize the key areas for reforms, but it did not mention "curbing the property market" as it always had done before.

"This is a very important message. Instead of restricting home purchasing, the meeting mentioned ‘unleashing' demand, which showed a new and different approach," Xu said.

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