China to maintain rapid growth: Economist (Reuters) Updated: 2006-01-09 15:01
China's economy will maintain steady and rapid growth in 2006 as investment
and consumption become the major drivers of growth, a government economist said
in comments published on Monday.
Yao Jingyuan, chief economist of the National Bureau of Statistics, said the
most notable point for China's economic growth in 2006 was the remarkable role
of consumption as a key economic driver, official China Securities Journal said.
At a forum in last month the economist had predicted that China's gross
domestic product growth was likely to slow to between 8 percent and 9 percent.
It has been consistently faster than 9 percent for the past two years, and the
latest revisions suggest it has been exceeding 10 percent.
"China's economic growth should shift its reliance on investment and export
to investment and consumption," Yao said, adding domestic and foreign demand
should work together to push forward the economy.
He also said that household consumption should be the dominant factor for
domestic consumption and suggested that the main measures to expand consumption
should be to increase people's incomes and to raise the marginal consumption
trends.
Yao also said China's consumer price index growth in 2005 had not exceeded
1.8 percent, significantly lower than 2004's 3.9 percent.
However, another government economist suggested government and corporate
consumption be the main force for consumption.
Ba Shusong said the government and corporate saving rates were too high while
the household saving rate had been declining steadily.
"Too many resources are held by the government, with the fiscal revenue
growing faster than the economic output and undistributed corporate profits
amounting to about 20 percent of GDP," he said.
"Actually, household consumption has registered a big expansion, with more
and more residents buying houses and automobiles," he was quoted as saying.
Ba also said in the short term that it was hard for domestic consumption to
gain a big expansion and it was necessary to keep investment at a certain level
because it was difficult for the government to cut taxes and push corporations
to spend more.
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