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BEIJING: China’s economy is up against a triple threat of
weakening global growth, possible domestic overheating and the
catastrophic impact of recent severe weather.
It should still record-high growth this year,
said analysts and economic organizations.
China was fighting strong economic headwinds as
soon as 2008 started. Overseas, there’s little dispute that the
world economy is slowing as the impact of the US sub-prime crisis
ripples throughout the world. Then there are volatile international
financial markets and spiraling energy and food prices.
Domestically, China was hit by the worst
snowstorms in half a century this winter, while it was fighting to
prevent domestic economic overheating and curb inflation. The
weather caused at least 111.1 billion yuan ($15.43 billion) in
losses, inflicting severe damage on farms and households, forests
and the power grid.
To make things worse, consumer prices surged.
The consumer price index (CPI) accelerated from 6.5 percent in
December to 7.1 percent in January, the fastest pace in more than 11
years, on ballooning food prices.
Can China maintain steady growth this year? That
is likely to be a key topic at the country’s annual national
congress, to be held next month, which is expected to work out
measures to achieve prosperity.
Following are some views on the outlook for 2008
by economists and organizations in China and abroad.
On the positive side
• Dominique Strauss-Kahn, the managing
director of the International Monetary Fund, said during his visit
to China last week that although there had been some impact from the
sub-prime crisis on China, the IMF still expected the economy to
expand by 10 percent this year.
• The World Bank lowered its 2008
economic growth forecast for China from 10.8 percent to 9.6 percent
earlier this month. It said the economy would decelerate this year
but still maintain high growth, since China seemed able to resist
the negative impact of weakening global growth.
• Li Pumin, the spokesman with the
National Development and Reform Commission, said China had gotten
stronger over the past 30 years of opening up and its economic
fundamentals were not hampered by snowstorms in the southern region.
He didn’t give any specific figures.
• Xie Fuzhan, head of the National
Bureau of Statistics, said the United States and China were two
major engines of the world economy. The decelerating US economy will
no doubt have a negative impact on the world economy. So the slowing
in the Chinese economy, which had been on the verge of overheating,
will be what Chinese decision makers had expected, he said.
• Fan Jianping, an economist with the
State Information Center, a government think-tank, echoed Li, saying
there had been no change in the fundamentals of the economy. He said
growth could still hit around 10.5 percent for 2008. He added that
the impact of the weather would be transient and limited and could
hopefully help cool the economy.
On the negative side
• Wang Jian, a macroeconomic analyst
with the National Development Reform Commission, said China faced
the risk of “stagflation,” a period of inflation combined with
economic stagnation.
• Ha Jiming, China International Capital
Corp. Ltd. chief economist, said the economy will keep growing
rapidly in the next eight to 10 years but with fluctuations, which
will be most likely to occur in 2008 and 2009.
-- Xinhua
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