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UNCTAD projects China's economic growth at 7.8%

(Xinhua)
Updated: 2009-09-08 09:57

The Chinese economy is expected to grow 7.8 percent this year while the global economy is likely to drop more than 2.5 percent, the United Nations Conference on Trade and Development (UNCTAD) said in a report released Tuesday.

In the Trade and Development Report 2009, the UN agency said expanding domestic demand policies had helped China resist recessionary pressures.

In the first half, the Chinese economy registered a growth of 7.1 percent, of which more than 80 percent was fueled by government investment.

"The Chinese government had made the economic policies properly as China experienced a positive growth in gross domestic product (GDP) in the first half of the year, albeit she was also affected by the global financial crisis," Supachai Panitchpakdi, secretary-general of the UNCTAD, told reporters on September 3 when an unveiling ceremony of the annual trade report was held in the northeastern Chinese city of Changchun, capital of Jilin province.

The report was unveiled during the Fifth China Jilin Northeast Asia Investment and Trade Expo that ran from September 1 to 6, but its content was not be published until September 8.

The Chinese government announced its 4-trillion-yuan ($585-billion) stimulus package in November last year to boost domestic demand and economic growth amid the global downturn. The money will be mainly spent on new highways, railways, housing, schools, hospitals and environmental protection projects.

According to the UNCTAD report, the impact of higher public spending on infrastructure as well as credit expansion is already visible in China and a country's proactive counter cyclical policies may attenuate the effects of the economic slump.

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The report predicted the global economy will decrease by more than 2.5 percent this year. It said GDP in the developed nations will contract by 4 percent and output in the transition economies is expected to fall by more than 6 percent. In developing countries, growth is expected to decelerate from 5.4 percent in 2008 to 1.3 percent in 2009.

As to Asia, the report forecast GDP is set to fall in several economies in East and Southeast Asia that strongly rely on exports of manufactured goods.

East Asia should be able to maintain a 3.7 percent growth while Southeast Asia may have a 0.8 percent decline, although less than the average for the world economy, it said.