The Chinese government should not intervene in the stock and property markets which are experiencing corrections and officials should focus on tackling inflation, according to a renowned economist.
Fan Gang, director of the National Economics Research Institute and a member of the Monetary Policy Committee of the People's Bank of China, said the current corrections in the stock and property markets were normal for a fast expanding economy.
"It is not sustainable for an economy to keep expanding with a rate around 12 percent. China's double-digit growth in the past five years is already a miracle," Fan told a recent forum, according to the China News Service yesterday.
He said the corrections were good for dealing with the risks accumulated during the development and for preventing overheating. Without such corrections, the bubbles in the economy might burst, which was much more dangerous, he said.
Fan made the remarks after China unveiled key economic data showing the country's gross domestic product expanded 10.4 percent in the first half of this year, slowing from 10.6 percent in the first quarter and 11.9 percent last year.
His comments echo those of Ba Shusong, a deputy director of the State Council's Development and Research Center. Ba said earlier this month that investors should stop hoping the government will rescue the stock market with policy interventions, such as a stabilization fund.
The stock market on the Chinese mainland has been the world's worst performer so far this year as the benchmark indices have more than halved since last October.