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Experts detail risks to growth

Updated: 2013-10-30 08:39
By BAO CHANG ( China Daily)

China's economy will slow after 2030, when GDP growth is estimated to be 5.5 percent, creating challenges and risks, a senior economist said on Tuesday.

Li Wei, director of the Development Research Center of the State Council, made the comments at the Fourth World Industrial and Commercial Organizations Forum, held by the China Federation of Industrial Economics.

Li forecast that economic growth would exceed 7 percent in 2014, and expansion would be stable at about that level through 2020.

"However, after 2030, China's GDP growth will slip to 5.5 percent, compared with a forecast for a 7.6 percent increase this year," said Li.

Li said that the challenges facing China include excess industrial capacity, slowing exports and real estate bubbles.

The center recently surveyed more than 4,000 companies, and it found that 71 percent considered their excess capacity to be serious or very serious.

The survey found that 67.7 percent believe the situation won't improve in the short term and that it will take three years to digest the excess capacity, assuming a favorable policy environment.

Weak demand has depressed domestic coal and steel prices in recent months.

Shenhua Group Corp Ltd, the world's largest coal distributor, said that the company's power plants are becoming more profitable than its coal division because of decreased prices for the fuel.

The State-owned coal producer and distributor plans to acquire additional small and mid-sized privately owned coal mines, which are experiencing excess capacity and weak demand, according to Meng Jian, a spokesman for the Shenhua Group.

China's coal output is expected to reach 4.63 billion metric tons this year, far in excess of forecast demand of 4.12 billion tons. Other industries including aluminum, steel, solar power, wind power and shipping, are also burdened by excess capacity.

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