Over the next two years, China's economic growth will moderate
slightly due to tight macroeconomic controls and the effect of
government efforts to change the growth pattern, the Asian
Development Bank (ADB) announced yesterday in its annual
publication.
The Asian Development Outlook 2007 has laid out GDP
predictions for the next two years in China, claiming the economy
will grow 10 percent this year and 9.8 percent the next.
"The performance of the Chinese economy was exceptional in 2006
and will remain strong in 2007 and 2008," said Zhuang Jian, an
economist at the multilateral development bank.
Last year's 10.7 growth was in great part thanks to a
combination of rapid growth both in exports and fixed asset
investments. A change likely to take place in 2007 is the
measurable impact of moves to halt the double-edged sword of
runaway fixed asset growth.
Among the steps seen to slow down the economy has been the
People's Bank of China's decision to hike the base lending rate
from 5.58 to 6.39 percent and the reserve requirement from 7.5 to
10 percent in the past year to curb credit growth and investment
expansion.
Major government agencies such as the National Development and
Reform Commission and the State Environmental Protection
Administration have also brought aims for a greener China to bear
by raising energy efficiency and environmental requirements for
investment.
However, the ADB report cautiously points at the absence of any
clear trends to be had from the latest monthly data charts.
Figures from the National Bureau of Statistics have seen factory
output in January and February combined grow 18.5 percent from a
year earlier, compared to 14.7 percent in December and 16.2 percent
for the first two months of 2006. Meanwhile, fixed-asset investment
growth spiked from 20 percent in last year's fourth quarter to 23.6
percent in January and February.
Addressing the seeming lack of any progress, Zhuang conceded
"such progress was limited on most fronts," adding that
"difficulties in shifting the growth pattern will not be addressed
overnight."
Further advice provided by the ADB relates to China
strengthening its social security system, increasing spending on
education, healthcare and rural development, and rallying to
improve energy efficiency and environmental protection.
(China Daily March 28, 2007)