Drivers of growth more important than rise in GDP

China released its official GDP growth data for 2015 on Tuesday, with the figure coming in at 6.9 percent. Some media reports made a big fuss over the data, saying it was the slowest growth in 25 years and that China's economy is in deep trouble. But the truth is that China's economy is in a process of restructuring and laying foundations for sustainable growth in future. Is a country's economic growth rate that important? Of course it is important, but what matters more is the drivers of growth. Fast growth and a large economy are not so impressive if the growth is not driven by modern industries, advanced technology and competitive products. Take China and the US. China's economic growth was fanned by real estate investment for years, while the US economy has been driven by high-tech products. So even if the US economy grows more slowly, China still has a long way to go before catching up in the real sense. Therefore the 6.9 percent growth of China's economy in 2015 is not the key issue. But it does point to the fact that the economy and its drivers of growth are changing. There are two key factors that contributed to the slower GDP growth. First, the slowdown in fixed-assets investment - especially property investment, which grew only 1 percent in 2015 following average growth of 20-30 percent previously -naturally affects GDP growth. However, this also suggests that China's economy is moving away from its reliance on property investment and laying foundations for more sustainable growth. In this sense, slower GDP growth resulting from less aggressive property investment is not necessarily a bad thing. The key issue now is whether the Chinese government has the courage and insight to allow the economic adjustment to continue rather than giving up halfway. The other factor that affected last year's GDP growth was weaker exports. The country's exports, one of the three key pillars of the economy, fell 1.8 percent year-on-year in 2015. But this also shows the change in China's economic structure and growth drivers. Exports have played a vital role in economic growth since China joined the WTO in 2001. But the strong growth of exports that focused on raw materials cannot balance the relations between various factors such as environmental protection and labor resources. The slowdown in exports is inevitable and a positive sign for China's economic restructuring. Therefore, there is no need to worry about the current economic slowdown or about problems in the financial market. There are also two fundamental features of China's economy that are encouraging but that are often overlooked. Since China has embraced a market economy, there have been increasing disparities in the country's regional economic development. For example, the economies of some southeast coastal areas have reached a level similar to developed countries, but development in a lot of central and western regions lags far behind. However, these very disparities mean that the country's economy is resilient. If some local areas are in trouble, it does not fundamentally impact the overall economy. For instance, property market bubbles burst in East China's Wenzhou and North China's Erdos some years ago. This had a huge impact on the local economy in those areas, but their effect did not spread throughout the country. Therefore, crises in China's economy are often local but not national. This offers strong foundations for China's future growth. The other factor is that China has the world's largest internal market thanks to its population of 1.4 billion people. And the wide disparities in income mean the country has consumers at every level of spending power, so products with different prices can always find buyers in China. This creates huge opportunities for Chinese firms and the overall economy, and allows firms to cope with challenges from changes in economic cycles. As China has a unique economic environment and conditions, the hardship and problems the country is facing now should not be a source of concern. China will overcome them eventually. Some of the problems and difficulties China faces are a result of excessive intervention by the government and improper policies. Over the years, some international institutions and investors have persistently predicted that China will eventually face a difficult situation. But none of these predictions have come true. As long as the Chinese government keeps a clear mind, properly recognizes its own capacity and minimizes policy errors, growth of 6.9 percent or even lower will not be a problem. The only concern is the risk of China being diverted from its path as it moves away from over-reliance on property investment.