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To: funincolo who wrote (1554)	11/21/2000 2:38:01 PM
From: funincolo	Read Replies (1) \| Respond to of 2413

ADB raises China 2000 growth forecast to 8.0 pct BEIJING, Nov 21 (Reuters) - The Asian Development Bank, citing strong exports and growing domestic consumption, said on Tuesday it has raised its forecast for China's economic growth this year to eight percent, . "The growth rate is much higher than we expected," Min Tang, chief economist at the ADB's China representative office told reporters. In October, the bank forecast China's gross domestic product would grow 7.8 percent this year. In its latest economic review of China, the ADB maintained its forecast of 7.5 percent growth in 2001 and predicted robust growth of between seven percent and 7.5 percent over 2001-2003. China's GDP grew a year-on-year 7.1 percent in 1999. Tang said China's inflation rate should rise to two percent in 2001, as food and oil prices rose. "But two percent inflation is not much to worry about," he said. China's strong growth had helped it to reduce poverty, the review said. "However China's fight against poverty is far from over as there are still about 230 million people (18.5 percent of the population) living below the $1-a-day consumption norm," it said. An official from the state council, or cabinet, was quoted last week as saying China had eradicated absolute poverty, based on a benchmark of 635 yuan ($77) a year. "That means people are not starving to death, but that does not mean poverty is over," said Bruce Murray, the ADB's China representative. RISK OF DEPENDENCE China's exports were growing rapidly, with a 20.6 percent increase expected in 2000, thanks to Asia's economic recovery and continued strength in the U.S. economy, the review said. But China's dependence on world trade, which is 37 percent of GDP compared to 19 percent in the United States and 16 percent in Japan, put it in danger if the U.S. economy had a hard landing or if there were another Asian crisis, Tang said. The review also said domestic consumption, which has been declining for several years, accelerated in 2000 and should offset any slowdown in public investment as the government wound down fiscal stimulus measures. Fiscal policy was likely to remain expansionary, but monetary policy was likely to continue to be accommodative and interest rates should continue to be low, the report said. The ADB report also said China's accession to the World Trade Organisation (WTO), expected within months, would improve export conditions and widen consumer choices. But it also said the benefits would take about five years to materialise and there would be adjustment costs. "Addressing these challenges will require substantial structural adjustments across a wide range of sectors, including agriculture, automobiles, banking, insurance and telecommunications," the review said. 01:03 11-21-00