New interpretations needed as China enters new normal: former HK leader

Tung Chee-hwa, vice chairman of China's top political advisory body, said on Monday here that as Chinese economy enters the mode of "new normal", the interpretation of traditional statistics should also get improved.

Tung, who is also a former chief executive of China's Hong Kong Special Administrative Region (HKSAR), made the remarks in his keynote speech at the opening ceremony of the Future China Global Forum here.

Pointing out that managing a soft landing and achieving a new normal is never easy to such a huge economy, he stressed that it is "particularly difficult" as the global economy is still suffering from the after-effects of the economic crisis of 2008 and 2009.

As the "new normal" takes hold, traditional calculation of statistics does not work anymore, one example is the employment rate, he said.

"There has been concerns over whether employment would be affected as the economy entered the new normal," Tung said, however, he stressed, with GDP growing at 7 percent, "every dollar the GDP produced by the service sector, one third more jobs would be created as compared to jobs created by manufacturing sector."

"This is the say, even though as the whole economic growth is to drop from 10 percent to 7 percent, the employment should stay," he said.

He further explained his point with the latest economic data. According to the statistics released last Wednesday, 7 million new jobs have been created in the first half of 2015, which Tung said "indeed help to prove the contention to be correct."

"The new normal is well underway to create 10 million jobs as planned annually, or indeed even more," he said, adding that under the new normal, many economic pattern has to be interpreted carefully to draw conclusion.

In his speech, Tung also highlighted that as China enters the state of new normal, problems also emerged, including the disparity between industries and enterprises.

"Those regions eager to restructure and upgrade their economies will maintain a stable growth while those slow in action will suffer badly," he said, adding that new industries such as IT, high-end equipment manufacturing, new energy and e-commerce would go faster, becoming the new engine of economy.

Despite the difficulties, Tung remains optimistic about the future of China's economy.

Since 1949, from a impoverished, war-time country to the second largest economy in the world, it has not been an easy ride for China, he said, adding that a large economy integrating into a greater world is also much more complex.

"Combine that, managing a soft landing and achieving a new normal is almost an impossible task. But the Chinese economy has proven elasticity and potential that gave her a lot of leeway," he said. Endi