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| Experts Optimistic About China's Macro-economy |
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Economists and entrepreneurs attending the Boao Forum for Asia 2006 expressed their optimism in China's macro-economic situation on Sunday. According to statistics issued by the National Bureau of Statistics, China's GDP for the first quarter is 4331.3 billion yuan (US$541.4 billion), up 10.2 percent over last year and higher than the growth rate of 9.9 percent from the same period of last year. Li Deshui, former director of NBS, said China's high growth in the first three months is closely connected to the current situation of the global economy. The International Monetary Fund (IMF) adjusted its forecast to the economic growth of the United States in 2006 from 3.3 percent to 3.4 percent, and that of Japan from 2 percent to 2.8 percent. According to statistics, investment in fixed assets grew by 27.7 percent year on year to 1,390.8 billion yuan in the first quarter, retail sales reached 1,844 billion yuan with a growth of 12.2 percent and the volume of foreign trade, up 25.8 percent to 371.3 billion U.S. dollars. The strong growth of all the three major driving factors of the economy have jointly contributed to the high growth in the first three months, said Li. Stephen Roach, managing director and chief economist of Morgan Stanley, also said the 10.2 percent growth is within the normal range, "I don't think this is an urgent problem that needs dramatic clamping down," he said. The global rapid growth has caused the central banks of the United States, the European Union and Japan to discuss tightening of monetary policies for the first time in the past 15 years, said Roach. With the slowing down of the global economy, the Chinese economy is expected to cool down too, he said. "You cannot call an economy overheated just because of soaring growth over three months," said Li. Admitting the existence of over-capacity in certain industries, Li said the economy as a whole is still healthy. China plans to reduce its GDP from an annual average of 9.5 percent in the past 25 years to 7.5 percent in the next five years from 2006 to 2010 by improving economic quality and making domestic consumption the major driving force for economic growth. On one hand, China's rapid growth over the first three months is encouraging because it is continuing. On the other hand, it is also a little bit of a concern because it might indicate difficulties in containing growth, said Eric Baden, Chairman of Degussa (China) Co. Ltd. Despite this, Baden said he is optimistic about China's macro economy not only because of China's effectiveness in cooling down the overheating in certain industries but also for the long-term strategy to restructure the economy. Chinese domestic market for consumer goods is undergoing a rapid development. It makes China the most attractive market for Degussa A.G., the world's largest speciality chemicals maker, said Baden. Roach with Morgan Stanley holds the same opinion. "The potential of Chinese consumers could well be one of the greatest opportunities for the global economy in the 21st century. Unlike the earlier false hopes, this one seems to be real", he said. (Xinhua News Agency April 24, 2006) |
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