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GDP adjusted for long-term growth

GDP adjusted for long-term growth

Updated: 2012-03-07 08:19

(Xinhua)

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GDP adjusted for long-term growth 

Migrant labourers wash a roof near The Bund on the banks of the Huangpu River in Shanghai March 6, 2012.?[Photo/Agencies]

 

WASHINGTON - The purpose of China's lowering of economic growth target was to ensure long-term smooth economic growth, said a World Bank (WB) economist on Tuesday.

"Talking about China's lowered growth rate, I think we are not talking about a temporary adjustment. We are talking about more long-term development issues," the World Bank's Chief Economist and Senior Vice President Justin Yifu Lin said as he launched his new book in the Washington-based global institution.

China lowered its growth rate because "there are some overheating in certain sectors," and "there are some inflation pressure," Lin said, adding that the slowdown is aimed at ensuring smooth economic growth in the long run.

China cut its GDP growth target to 7.5 percent this year, compared to 9.2 percent in 2011. This is the first time China has lowered its annual economic growth target after setting it around 8 percent since 2005.

The renowned Chinese economist stressed that the Chinese government's financial status is comparatively good and China has accumulated huge foreign exchange reserves. Based on these favorable conditions, China needs to continue its industrial upgrading and use its comparative advantages to improve its competitiveness.

In his new book entitled "New Structural Economics," Lin argues that globalization offers a way for developing countries to exploit the advantages of backwardness and achieve a faster rate of innovation and structural transformation than is possible for countries already on the global technology frontier.

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