During his recent visit to central China's Henan province, President Xi Jinping spoke about the nation's economic development, reports the China Business News.
"China is still in a significant period of strategic opportunity. We must boost our confidence, adapt to the new normal conditions based on the characteristics of China's economic growth in the current phase and remain cool-minded," Xi said.
The term 'new normal' was first used by Mohamed El-Erian, chief executive and co-chief investment officer at global investment firm PIMCO, and the term is generally used to refer to the slow and painful process of economic recovery in the wake of a crisis.
An official told the paper that as a major part of the world economy, China's economy could not avoid the emergence of a 'new normal' state, adding that based on the micro-data available during the last two years, "We should realize quickly and shift from the past normal to the new normal."
The official also emphasized that the concept of a 'new normal' had won recognition by a majority of officials in economic areas, and Xi's recent remarks have set a unified tone.
Liu Peilin, deputy director at the Department of Development Strategy and Regional Economy of Development Research Center under the State Council, said that compared with the past normal; the new normal had several features.
China's growth will be lower than the growth seen during the last decade, but it will still be higher when compared with other global economies, Liu noted. The prime growth driver will be related to industrial upgrading and transformation, increased production and innovation, as well as an economic restructuring, he said.
Wang Yiming, secretary-general of the National Development and Reform Commission, said the challenges posed by the 'new normal' would mainly focus on four areas - excess capacity, a rapid rise in factor costs, insufficient innovation capacity of enterprises, and the possibility of increased financial risks.
"The biggest difference in the present situation and that of a decade ago is that China's economic competitiveness is entering a bottleneck," a market observer told the paper, adding that "over the past decade, China gained a bigger market share in international trade and relied on low costs, but such an edge will be cut dramatically and even disappear over the next five to 10 years."
Meanwhile, a report by the United Overseas Bank noted that with China entering a stage of reform and restructuring, its economy will also enter the 'new normal' of moderate growth and this slower growth trend could extend to the second quarter of 2014.
