Economy

China to grow 10-11% this year: economist

(Agencies)
Updated: 2010-08-09 11:29

China's economy will enjoy a strong, stable second half, putting it on course for full-year growth of about 10-11 percent, a leading government economist said in comments published on Monday.

The forecast by Zhang Yutai, head of the Development Research Center, a think-tank under China's cabinet, is more bullish than those of many independent as well as some government economists, who have been revising down their predictions to the 9-10 percent range.

"Provided that that fiscal expenditures achieve the target of an 11.4 percent increase this year, 2010 GDP growth should be about 10 percent," Zhang was quoted as saying by the Shanghai Securities News.

"If fiscal expenditures top the 11.4 percent target, and domestic and external demand don't drop sharply in the second half, then this year's GDP rise should be about 11 percent," he said.

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Separately, Xia Bin, an academic adviser on the central bank's 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.

"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," he was quoted as saying in a report by the official Xinhua news agency.

By contrast, 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 percent in annual terms early next year, but that the government should desist from rolling out a fresh stimulus package to compensate for the weakness.

"When adjusting economic structure and changing the pattern of economic expansion, China is sure to encounter a moderation in growth," Wu said in an article in the People's Daily.

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