China's economy is slowing.............................................
hkstandard.com
Official disputes growth forecast
BEIJING: An economist with the State Planning Commission on Monday disputed a forecast by a research institute that economic growth would dip to six per cent this year.
Wang Jian, deputy general secretary of the commission, said the forecast was too low.
China's Investment Research Institute, a think tank affiliated with the State Planning Commission but not officially part of it, predicted that gross domestic product growth would fall to six per cent in 1998. The forecast represented a substantial drop from the 8.8 per cent growth China posted in 1997 and the 9.7 per cent growth of 1996.
The prediction also well below even the lowest official forecasts to date.
An official with the State Statistics Bureau projected in the Business Daily on Sunday that under current conditions, the country should achieve economic growth of ''around eight per cent'' this year. That is already lower than previous official forecasts of 9 per cent.
The six per cent figure puts China well under the minimum growth rate of seven to eight per cent that the World Bank predicted it needs in order to create enough new jobs to fend off social unrest.
''They are a research group. They are not the State Planning Commission itself,'' Wang pointed out. ''I think six per cent is impossible. It definitely will be over 10 per cent growth.''
He said that his own opinion was that China will see 11 per cent growth in 1998 - a rosy estimate given the Statistic Bureau's downgraded consensus of eight per cent.
Mr Wang conceded the Southeast Asian crisis was likely to have some negative effect on China's exports, due to the relative depreciation of its neighbours' currencies.
He sees the growth in China's exports slipping in 1998 to 10 to 12 per cent, from 20 per cent in 1997.
''Because of the Southeast Asia crisis, there could be some influence on exports, because Southeast Asian countries' prices are lower,'' he said.
''But foreign investment will be a little higher than before. Southeast Asia is suffering from financial turmoil, and foreign businesspeople dare not invest there, so they may come to China instead.''
Although China's fixed asset investment grew by nine per cent in 1997, its contracted foreign investment fell by 28 per cent. Mr Wang wouldn't give a figure for how much he projects foreign investment will grow this year. _ AFP |
