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Good news: China's economy cooling slowly

SHANTOU - China's macro-control policies are achieving positive results in cooling the overheated economy. The GDP growth may stand around 9.2% this year and is expected to slow down to 8-8.5% in 2005, experts at the State Development and Reform Commission (SDRC) predict.

Experts predict that China's investment growth and export growth may go on slowing down in 2005, thus slacking the country's economic growth to a moderate range in the year.

Experts suggest Chinese Government adopt structure-oriented macro-economic policies in 2005 to keep stable its financial and monetary policies. Meanwhile, they urge the government to pay equal attention to strategic adjustment of economic structure, moderate adjustment of financial and monetary policies and change of growth mode.

According to experts, the effect of macro-control policies mainly fall into 3 aspects:

Overheated growth of some indices has dropped obviously and total investment growth has dropped sharply.
For example, fixed assets investment in urban area has dropped from 53% at the beginning of this year to 30.3% in January-August.

Some cool indices have grown obviously. Deducting price factors, total retail sales grew 10.2% in real terms in the period, over one percentage point higher than in the same period of 2003; farmers income grew sharply; and the number employed increased by 552,000.

Price growth is within bearable range of consumers and the pressure is easing.

Though consumer price index has grown 5% for three months in succession. The 4% growth in January-August period shows that China's economic growth has been within moderate inflation range.

(Asia Pulse/XIC)

Oct 27, 2004

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