China's economic trend to be 'L-shaped': People's Daily

Reuters

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A worker walks on a beam at a construction site for a new commercial building in Beijing, December 15, 2014. A worker walks on a beam at a construction site for a new commercial building in Beijing, December 15, 2014.

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China's economic trend will be "L-shaped", rather than "U-shaped", and definitely not "V-shaped", as structural reforms take time, but the government will not use excessive investment, or high rates of credit growth to stimulate growth, the official People's Daily reported on Monday, citing an "authoritative source."
Although China's economy stabilized in the first quarter, much of the growth was investment-driven, but structural problems persist, meaning it could take many years before new engines of growth can take a leading role, the newspaper, regarded as the Communist Party's mouthpiece, reported.
China must step up supply-side reforms, and there is no need to stimulate growth by excessive credit growth that could heighten risks and could trigger a systemic financial crisis if not controlled properly, the newspaper said.

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