Macroeconomic indicators - China to grow by 10 to 11pct this year - Economist

Tuesday, 10 Aug 2010
China Daily quoted a leading government economist said China economy will enjoy a strong, stable second half putting it on course for full year growth of about 10% to 11%.

The forecast by Mr Zhang Yutai head of the Development Research Center a think tank under China cabinet is more bullish than those of many independent as well as some government economists who have been revising down their predictions to the 9% to 10% range. He said that "Provided that those fiscal expenditures achieve the target of an 11.4% increase this year, 2010 GDP growth should be about 10%."

Mr Zhang Yutai said "If fiscal expenditures top the 11.4% target and domestic and external demand don't drop sharply in the second half and then this year GDP rise should be about 11%."

Separately, Mr Xia Bin an academic adviser on the central bank monetary policy committee, pointed at where the government should look to ramp up its spending. With Beijing not about to relax its crackdown on property speculation, it should put more money into affordable housing to pick up any slack.

He said that "We should speed up investment in guaranteed housing, avoid an excessively rapid fall in investment and ensure that Chinese economic growth remains fast and stable."

By contrast, Ms Wu Xiaoling a former vice governor of the central bank said that China should learn to tolerate slower growth as the result of efforts to reconfigure its economy toward more reliance on consumption and less on capital investment.

She said growth could slow to 8% in annual terms early next year, but that the government should desist from rolling out a fresh stimulus package to compensate for the weakness. She added that "When adjusting economic structure and changing the pattern of economic expansion, China is sure to encounter a moderation in growth."

She also said that "We should not lightly change the direction of policy. Otherwise, we'll pay an even higher cost in the future."

(Sourced from China Daily)