China's macroeconomy safely slowing: Morgan Chase
(Xinhua)
Updated: 2005-06-15 10:25

China's macroeconomy can no longer be properly described as "overheating," as the country's economic growth peaks and gradually slows, the latest report from the Morgan Chase Company said Tuesday.

"We'd rather use 'moderate' to describe the growing trend of China's macroeconomy," Morgan Chase economist Ben Simpfendorfer was quoted as saying by the Beijing-based First Finance Daily Tuesday.

A decline in the investment of fixed assets has been attributed to the moderate trend, said the newspaper.

The cement industry, for instance, has seen a reduced production capacity. Nearly 2,000 of the country's 5,700 manufacturers have either reduced or halted their production this year amidst a sluggish market demand and rising production costs spurred by increasing raw material prices, said the report.

According to previous figures released by the National Bureau of Statistics, the country's combined investment in fixed assets between January and April decreased 1.9 percentage points to 25.7 percent from the same period last year.

Meanwhile, the growth rate of financial institutes' balance for loans slowed 2 percentage points from the end of last year to 12.5percent in April. The deposit balance of companies grew at 13.2 percent, about 3.6 percentage points less than the end of last year.

Wang Jianzeng, executive deputy secretary-general of the Macroeconomy Society of the State Development and Reform Commission, warned that the real concern of China's macroeconomy could be deflation as the year-on-year increases of consumer product index have been 1.8 percent for two consecutive months since April.

According to the newspaper, the Morgan Chase report predicted that China's gross domestic product (GDP) will grow 8.5 percent in the first six months of this year and slow down to higher than 8 percent at the end of this year.

Jim Walker, chief economist of the Credit Lyonnais Securities for Asia-Pacific Market, also projected a slower growth rate for China's economy.

China's GDP will grow 8 to 9 percent this year but slow to between 6 and 7 percent next year, he said to the newspaper.

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