YEREVAN. –  In the years to come, China will need to accept slower growth rates, Mr Benjamin F Jones, a researcher at the Kellogg School of Management (part of the Northwestern University, Illinois), told Armenian News – NEWS.am.

Commenting on the recent monetary policy move of Beijing, he pointed out that it could help stimulate economy in the short term, but China more generally needs to accept a slower growth rate.

According to the World Bank data, GDP growth in China, albeit still high, has been decelerating over the last few years (from 10,6% in 2010 to 7,4% in 2014).

On August 25, the People’s Bank of China has cut key interest rates and banks’ reserve requirements for the second time in two months. Interest rate cut was the fifth since November 2014.

“Such acceptance means making effective policy choices and avoiding excessive support for vested interest groups that are underperforming,” Kellogg School expert said.

Vested interest groups, embedded in the central and provincial governments, were recognized by no other than China’s Prime Minister, Mr Li Keqiang in 2013, when he said that “tackling vested interests is harder than to touch one’s soul”.

In the years ahead, investment returns inevitably will face downward pressure, and the fuel of high enterprise saving rates will likely become more limited as a source of growth, especially as migrant workers from rural areas, employed in cities, demand higher wages, Mr Jones added.

Chinese demand has become one of the key factors for Armenia’s mining and metal exports revenues over the years.

The news of China’s new round of relaxing monetary policy initially tilted metal prices upwards in hopes for a resurgence of industrial demand in China. But that did not translate into a constant trend, as official manufacturing Purchasing Managers' Index of China declined to 49.7 in August, down from 50.0 in July.