It will take several years for the Chinese economy to complete its soft landing and the issue of excess capacity must still be addressed during the first half of the 13th Five-Year Plan (2016-20), Fan Gang, a member of the Monetary Policy Committee of the People's Bank of China (PBC) said Saturday, financial news portal ifeng.com reported on Monday.
A soft landing refers to the process of an economy shifting gradually from growth to a potentially flat performance as it continues to develop but avoids a recession.
Fan, speaking at the 2015 NEO Wealth Summer Financial Summit in Shanghai, said that the sluggish economy reflected declining investment and a fall in exports.
Fan said that China's GDP growth may remain low for years to come.
According to Fan's forecast, GDP growth this year may fall short of the target of 7 percent, and 2016 will be tough as well.
Based on the outlook of the International Monetary Fund, China's growth will slow to 6.8 percent this year and further to 6.3 percent in 2016, as the country continues to cope with vulnerabilities, the Xinhua News Agency reported earlier this month.
Fan said that a recovery may develop in 2017.
"I don't think the current economic downturn will last forever. This downturn has a cyclical nature, which is eliminating excessive production capacity," Fan was quoted in the report as saying.
China has still been able to achieve 7 percent GDP growth even though the Producer Price Index has been declining year-on-year for 41 consecutive months, Fan said.
That situation signifies that the country's normal growth rate could be higher than 7 percent, Fan said, and after restructuring, the economy will perform better.
