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Steady macro policies to continue - analysts

Updated: 2012-12-14 07:31

BEIJING - Analysts anticipate steady macroeconomic policies will continue to prevail next year as China's economic growth is showing signs of a rebound.

Recent releases of key economic indicators show China's economy is warming up after slowing to its weakest point in more than three years.

"Indicators tracking industrial output, investment and consumption have witnessed accelerated growth after continuous declines before August," said Zhuang Jian, an economist with the Asian Development Bank.

In November, China's value-added industrial output rose 10.1 percent year on year, edging up from 9.6 percent in October and 9.2 percent in September, according to the National Bureau of Statistics (NBS).

Besides the recovering industrial output, the purchasing managers index (PMI) for China's non-manufacturing sector increased for a third consecutive month to reach 55.6 percent in November, the NBS data showed. A PMI reading of 50 percent demarcates expansion from contraction.

The country's PMI hit an annual low of 49.2 percent in August, while gross domestic product (GDP) growth dipped to 7.4 percent in the third quarter of the year.

With more positive data coming out, however, economists have dispelled earlier doubts and become more certain about the 7.5-percent growth target China set for itself earlier this year and the effects of its macroeconomic policies.

Zhang Liqun, an macro-economist with the Development Research Center of the State Council, or China's Cabinet, predicted that China's yearly GDP growth will land between 7.5 percent and 8 percent.

"The continuity and stability of macro policies are closely linked to the results that augur a steady growth. The economic trends so far have showed that the strength of macro-control is appropriate," said Zhang, adding that the country should carry on with the trend and that there is no need for targeting higher growth.

Echoing Zhang, Zhu Haibin, chief China economist at JP Morgan Chase & Co., said that China will stick to its current proactive fiscal policy and prudent monetary policy in 2013.

China's central bank has moved cautiously to loosen its monetary policy in response to the economic downturn this year, as it is wary of refueling inflation and fanning house prices.

The bank has reduced interest rates and the reserve requirement ratio for lenders twice this year, but refrained from further cuts since July.

Although latest official data showed that new yuan-denominated lending shrank slightly year on year to 522.9 billion yuan (83 billion U.S. dollars) in November, economists believe the bank will likely maintain a stable credit scale over the next few months, as the scale is high enough to support an economic rebound.

Zhang expects China to continue to maintain steady growth and improve people's livelihood next year while focusing on industrial upgrading and reform in the long run.

China will set the tone for next year's economic policies in the upcoming Central Economic Work Conference in Beijing, the date of which is yet to be announced.