China policies will slow economic growth: report

A think tank at People’s University has forecast China’s economic growth will slow to about 9.25 per cent in 2007...

A think tank at People’s University has forecast China’s economic growth will slow to about 9.25 per cent in 2007 and remain near that rate through 2010, the Beijing News reported on Sunday.

In its first macroeconomic report, the university’s Economic Research Institute predicted China’s gross domestic product (GDP) would pull back from projected annual growth of about 10.48 percent this year in response to government cooling measures.

The estimates for 2006 and 2007 were roughly in line with a range of recent economic forecasts from various economists polled by Reuters. “Judging from the medium and long-term views, the macro-economy of China will end its prosperity stage of this economic cycle, but there will be no deflation or stagnancy,” said Liu Yuanchun, an analyst at the institute who prepared the report.

Story continues below this ad

The researchers predicted consumer inflation would be 1.5 per cent in 2006 while annual fixed-asset investment growth would hold near 27 per cent.

At a briefing to release the report Wu Xiaoling, vice governor of China’s central bank, praised the report for its “high quality,” the newspaper said.

Liu predicted that annual GDP growth in the fourth quarter will be 9.62 per cent, down from 10.4 per cent in the third quarter and 11.3 per cent in the second quarter.

“If the current stable financial and monetary policies can be maintained and the government adopts some selective contraction policies, then the national economic growth will keep the trends of the second half of this year, and the GDP growth rate next year will drop to 9.25 per cent,” he said.

Story continues below this ad

The report projected annual GDP growth would remain slightly higher than 9 per cent through 2010.