J.P. Morgan expects steady Chinese economy in 2015

Leading investment bank J.P. Morgan Chase predicted China's economy will maintain steady growth in 2015, boosted by rising consumption and the service sector.

"We are still optimistic about China's economic outlook in 2015," said Jing Ulrich, managing director and vice chairman of the bank's asia pacific branch.

She said reforms are a significant factor in bettering the economy.

"Reform is the key word of the year of 2015," she said, "The government will continue economic reforms to improve competitiveness."

China saw its GDP expand at 7.4 percent year on year, the slowest in 24 years. But ongoing reforms will likely help it gather strength.

Ulrich said China's reforms in finance, taxation, state-owned enterprises and household registration, if successful, will improve the quality of the economy and facilitate restructuring, preluding new growth.

China's policy makers support her view, confirming the country's economy has entered into a "new normal" that features quality growth and sustainable development.

"Meanwhile, China's burgeoning consumption demand and service sector will replace traditional engines of manufacturing and investment to drive economic growth in 2015," Ulrich said.

In 2014, the added value from the tertiary sector accounted for 48.2 percent of the GDP and consumption contributed to 51.2 percent of economic growth, both higher than the previous year, data from the National Bureau of Statistics showed.

She forecast the economy will expand at 7.2 percent in 2015 as the authorities continue targeted regulatory measures.

"The central bank is likely to lower interest rates in the first quarter and cut the reserve requirement ratio twice throughout the year," Ulrich added. Endi