China's 13th Five-Year Plan to inject fresh momentum into its economy

2016-03-18 18:10:57 GMT2016-03-19 02:10:57(Beijing Time)  Xinhua English

by Xinhua Writer Wu Congsi

LONDON, March 18 (Xinhua) -- China's 13th Five-Year Plan will provide its economy with a new driving force, Chairman of Standard Life Gerry Grimstone said in a recent interview.

"I am very optimistic about the Chinese long-term economic outlook," Grimstone said.

"I think that China has huge natural resources, and China is experimenting how to manage operation within a market economy. The good thing is that China approaches these matters with great consistency and great determination," he added.

"In the west, it is impossible to plan over that time period, but the nature of China is they can adapt long-term plans producing great change to benefit Chinese people over a period of time," he said.

He mentioned China's present five-year plan covering the period 2016-2020 sets an average annual growth target of above 6.5 percent, not an accidental figure because it is necessary to achieve the previously defined goal of doubling per capita income between 2010 and 2020.

This growth will not be achieved by export growth given the subdued nature of the global economy or by infrastructure spending in the short term. So capital productivity clearly has to be improved and this primarily will come from financial liberalization, improving industrial performance by redirecting into higher value-added products and continued reform of state-owned enterprises, according to Grimstone.

He also pointed out the Chinese government has enough policy instruments to cope with possible economic risks. "They look at the global financial crisis that we had in the West and do not want that repeated in China," he added.

"I think China is making great progress with economic reform, I have been working closely with Chinese authorities for 25 years in this area, I have seen such great changes," he said.

"Just look at the prosperity over Chinese people, I do not just mean those tier one cities. My business in China is operating in many cities across China, which included tier three and tier four cities. I look at the prosperity in those cities and I look at how people's life changes in the cities. And to me, that is economic reform," he said.

"China has clearly identified the UK as one of its key global partners and London as potentially its major international financial centre. We have made it very clear to China that their investment is welcome even in the most sensitive parts of a modern economy -- power, communications and transport," he said.

Grimstone also noted the City of London succeeds through intermediation and has to seek it wherever it can find it, because the British economy on its own cannot support the size of its financial services sector which in turn is so important to the British economy.

Looking to the future, one of the biggest sources of intermediation will be China, through for example offshore trading of the Chinese currency RMB, capital raising for companies and projects, the international diversification of Chinese investment portfolios, he said.

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