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Economists confident on 8% growth target

By Si Tingting (China Daily)
Updated: 2009-05-21 08:18

Shoppers at a supermarket in Chongqing. [Xu Kangping]

Chinese economists have expressed optimism that the targeted 8 percent economic growth is achievable if the nation manages to rein in rising inventory levels, check manufacturing overcapacity and reduce its dependence on external demand.

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"With stronger domestic demand, China is very likely to see its economy facing better conditions this year and the government's goal of 8 percent growth will be more than achievable," said Wang Yuanhong, senior economist and head of the Economic Forecasting Department of the State Information Center at a seminar organized by the All-China Journalists Association.

Wang, however, expressed concerns on whether the current economic recovery is sustainable.

Xu Lin, director general of the fiscal and financial affairs department at the National Development and Reform Commission, said China can achieve its goal of 8 percent growth this year as it has enough resources to add to government spending if needed.

Many observers suspect this may be an overestimate. The World Bank estimates that a 6.5 percent growth is more realistic and said the enthusiasm about an economic recovery in China may be "premature" as private investment lags behind government spending.

Most China watchers, however, feel that an 8 percent growth is required to boost employment.

China will also have to identify new growth sectors apart from the saturated automobile and real estate markets, Wang said.

"Technological innovation, green energy and biotechnology sectors could be new investment destinations, especially from the private sector," said Wang, adding that, stimulus spending by the central and local governments are essential to "stabilize" the economy from falling further.