China, The World'S Second Largest Economy, Grew By 6.9% In 2015.

China's economic growth will slow down in the current quarter, and the road ahead will be rugged, but there is no need to panic.

Despite the "shock" of wages, employment and consumption, it is predicted that the economic growth rate in 2016 will drop to 6.4%. Song Yu said he had no negative view of China's economic prospects and did not agree with the prediction that China's economy is going to collapse.

Song Yu said that some people are talking about extreme views, saying that the whole machine is not functioning properly. This is not what we see. In general, the flight direction of this aircraft is no problem and it is in the controllable range as a whole.

Song Yu, chief China economist at Goldman Sachs, said that China's economic growth will slow to 6.7% in the first quarter of this year, because the contribution of the financial services sector to the economy is weaker than that of the same period last year, and policies and measures to support economic growth have gradually weakened since the last quarter of 2015.

He has performed best in the past two years in the Bloomberg rankings of China's overall economic forecast.

Data released on Monday highlighted the challenges facing China, the world's largest trading nation. Imports fell by 18.8% in dollar terms in January, and exports fell 11.2%.

When the economy slows down, "policymakers will take measures," he said.

"Easing policy is enough to generate a small rebound in the downward trend," he said.

"They could have done more, but they didn't do that. This is very important.

They keep the ammunition, and they want to leave some ammunition to protect themselves from the risk of extreme tail risk.

Song Yu compares the Chinese economy to a self restrained person, for example, the deposit reserve ratio of commercial banks in China is one of the highest in the world, which embodies this restriction.

"He has a rope and chain, and he can walk 1 miles an hour," he said.

This is very different from those that can be taken 1 miles per hour after taking drugs.

If China meets some bumps, it just needs to untie some ropes.

Song Yu said that due to the advance of fiscal expenditure in the fourth quarter, another factor that restricts short-term economic growth comes from the financial sector.

This means that the financial support usually available in the first quarter will be absent this year.

Other headwinds include wage and employment shocks brought about by the economic slowdown.

He pointed out that after a stable period, policymakers may again be careful in guiding the downward trend of the RMB exchange rate.

He estimates that the renminbi will depreciate against the US dollar by the end of this year and will fall to 7.3 by the end of 72017.

"We believe that 10% or slightly more depreciation will be enough to make the exchange rate reach a distance equilibrium level," he said.

This week, policymakers stepped up measures to support the economy.

According to people familiar with the matter, China's national development and Reform Commission will arrange more special construction funds for local governments this year.