China's president is confident services can propel economic growth in the years ahead

China’s president Xi Jinping greeted by Australian PM Tony Abbott. Photo: Mike Bowers/Getty Images

President Xi Jinping believes China’s economy still enjoys a promising outlook despite downward growth pressure.

Over the weekend, Jinping pointed out that the Chinese economy was in good condition with unchanged factors, including sound economic fundamentals, remarkable flexibility, huge potential and room to grow, according to state-run newswire Xinhua.

Borrowing a line from noted US fund manager Bill Gross, Jinping believes Chinese economic growth is now entering a new stage of slower but more resilient growth, something he dubbed the “new normal”.

The essence of the “new normal”, according to Jinping, is not fast growth, but an improved economic structure that relies heavily on the services industry, consumption, and innovation.

Xinhua reports China’s services sector grew by 8.4% in the first half of the year, accounting for 49.5% of the country’s overall economic output.

While Jinping sees it as the centrepiece of China’s growth future, the reliance upon the nation’s financial services sector, largely a result of surging stock market gains, has raised concern among some analysts that the growth momentum seen in the first half of 2015 will be hard to sustain in the six months ahead.

Last Wednesday China’s national bureau of statistics reported that the economy grew 7% in the year to June, beating expectations for growth of 6.9%.

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