French economy minister doubts China growth data

[DAVOS, Switzerland] France's economy minister, Emmanuel Macron, said on Friday he believes China's official figures overstate the true pace of its economic expansion, warning that the tough international climate will not help Europe.

The minister cast doubt on the reliability of China's figures, including its announcement this week that its economy grew by 6.9 per cent in 2015, the slowest rate in a quarter century.

"I said a few months ago that I don't believe for a second the figures that are being given. I think those that are still being officially announced are probably well above the reality but we just have to live with it," Mr Macron said at a gathering of the business and political elite in the Swiss ski resort of Davos.

Concerns that the slowdown in Chinese economic growth may be more brutal than Beijing admits have contributed to deep concern on world financial markets.

The global economic environment is unlikely to be helpful to the French or European economies, the minister said, underscoring the need to pursue economic reforms.

"What is really worrying is to see to what extent we have an economic and geopolitical environment that has become extremely volatile," Mr Macron told reporters.

"Honestly, to be clear, we cannot expect any surprise events to boost French and European growth," he added.

"Truly, if we should focus on something this year it is to reform our economy as radically as possible," said the minister, who is fighting to push through economic reforms including making it easier for shops to open on Sundays.

Besides the slowdown in growth in China, the world's second largest economy after the United States, slumping oil prices were also destabilising petroleum-exporting countries, he said.

Adding to global uncertainties were the problems facing emerging economies, financial market volatility, conflict in the Middle East, the refugee crisis and jihadist terror attacks in Europe, he said.

The Europe Union's internal tensions compounded the difficulties, he said.

"We have the risks of fragmentation, the divergence of our economies, of our political choices, of our collective preferences," he said, evoking notably terrorism and European nations' response to the huge flow of refugees from fighting in the Middle East.

France emerged from three years of economic stagnation last year with growth of more than 1.0 per cent, but 650,000 people have been added to the jobless total since Francois Hollande became president in 2012.

Mr Hollande pledged on Monday to spend more than 2.0 billion euros (S$2.9 billion) on tackling France's "state of economic emergency".

Joblessness, which stands at around 10 per cent or 3.57 million people in the eurozone's second-largest economy, was the "only issue that ranks above security for the French people", the president said.

AFP