China's GDP growth for 2003.
***Chinese Fortunes: The official government target back in
March was 7%. But the central bank's monetary policy committee
just revised that to 8.5%. And a leading economist says it could
roll in at 10%. What am I talking about?
This should come as no surprise, since China has enjoyed a
remarkable economic expansion this year. What is surprising,
however, is how easily the country shrugged off the crippling
impact of the SARS virus and regained its strong growth. During
that difficult SARS-affected second quarter, China's economy
still grew by a very healthy 6.7%.
In fact, growth has accelerated to such an extent that the
People's Bank of China just upped its growth forecast for this
year to 8.5%, thanks to a remarkable 9.1% expansion during the
third quarter. Part of the reason for that was an incredible
46.7% surge in auto production in August. Sales have risen by
31% as the sector has enjoyed a vibrant boom this year, helping
to boost profits for the top 14 automakers by a combined 77%,
according to the Xinhua News Agency.
But I digress. Back to those growth figures...
Wu Jinglian, a leading Chinese economist, thinks the bank's
forecast is still too conservative. According to a report in the
Business Times, he's calling for 10% growth this year, saying
the official data is flawed and doesn't reflect the true
picture. He cites strong industrial production, 21.7% tax
revenue growth and the rapid 15.6% expansion of China's power
generation as reasons for the difference.
And despite fierce international complaints that China is
deliberately undervaluing its currency, the bank asserts that a
stable yuan is one of the keys to continued economic strength.
It has pegged 2004 growth at just over 7%, thanks largely to an
expected breakout for one of the country's most beleaguered
industries.
The Financial Times quotes the World Travel and Tourism Council
as saying China's tourism industry is set for "staggering
growth" after the SARS epidemic cost it US$7.7 billion in lost
revenue and 2.8 million jobs. The Council foresees growth of 22%
next year and more than 10% per year over the next decade. The
question now is whether the country's infrastructure can handle
such a flood of foreigners. |
