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BEIJING - China"s economy is likely to grow by around 5 to 6 percent in the 2020s, remaining at the medium-pace growth section of the L-shape pattern, China Daily reported Friday citing a senior researcher at a government think tank.

Liu Shijin, vice president of the China Development Research Foundation, said at the China Finance Annual Forum the economy had entered a moderate growth track and would continue to grow at the bottom part of the L-shape pattern.

The L-shape pattern comes when the economic growth rate first falls and then levels out, thereafter maintaining medium-pace growth.

He said that the recent recovery of industrial profits was likely to support the Chinese economy to rebound a little in the coming months, but it does not point to a major increase of the country"s growth pace.

Profits of China"s major industrial firms increased 21 percent year on year in 2017, the fastest pace since 2012, according to a statement released Friday by the National Bureau of Statistics (NBS).

The reading was 12.5 percentage points faster than the growth rate registered in 2016.

Liu said that to achieve its target of doubling GDP by the end of 2020 from a decade earlier as scheduled, Chinese economy needs to grow 6.3 percent annually.

In 2017, the figure stood at 6.9 percent, picking up for the first time in seven years and well above the government annual target of around 6.5 percent.

Such better-than-expected growth has been propped up by booming domestic consumption, robust trade, and new technologies which boosted external demand and international labor productivity, analysts said.

To ensure the steadfast transition toward high-quality development, however, some efforts must be taken, including reducing the size of the government balance sheet.

Liu said the government needs to develop more sustainable financing channels to attract private capital to invest in public goods and solve the piling up of local government debts.

Bert Hofman, the World Bank"s country director for China, Mongolia and Korea in the East Asia and Pacific Region, said that local governments should not bail companies out or provide guarantees for debt repayment, but should let borrowers shoulder their own responsibilities instead.

Ren Zeping, chief economist of Chinese property developer Evergrande, said that efforts to deal with financial risks need to be implemented steadfastly for at least the next three years, otherwise existing problems will trigger new risks affecting the healthy growth of the economy.


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