China’s economy could grow by more than 10 percent in the fourth quarter, spurred by massive investment and rising consumption, state press said yesterday, citing a top government think tank.
‘RECORD LEVELS’
“The economy is benefitting from fast-paced investment, record levels of consumption, rising exports to international markets and the stable resumption of industrial growth,” China News Service cited Yu Bin (余斌), a top economist at the Cabinet’s State Council Developmental Research Center, as saying.
Yu told a symposium that China’s economy would witness growth of more than 10 percent year-on-year in the last three months of this year, with full-year growth at around 8.5 percent, the report said.
China could also maintain double-digit growth next year, Yu said, but the economy faced several challenges, including inflation linked to a vigorous government stimulus package and the appreciation of the yuan.
“If the Chinese yuan appreciates too fast, the huge numbers of export industries will suffer,” Yu said.
“But a small appreciation will attract more capital inflows and speculation over the yuan could bring instability to financial markets. China is facing these two difficulties,” he said.
The government must also adequately stabilize real estate markets that were responsible for a significant portion of the nation’s growth this year and which have gobbled up nearly one-fourth of investment, he said.
In the coming year, the government should continue to pump-prime the economy to ensure that consumption and investment do not decline, he said.
WORLD BANK
Earlier this month, the World Bank upgraded its growth forecast for China’s growth this year to 8.4 percent on the back of huge public spending, but said stronger domestic demand was needed to ensure a sustainable recovery.
China’s economy grew 8.9 percent in the third quarter — the fastest pace in a year — after expanding by 7.9 percent in the second quarter and 6.1 percent in the first three months, the slowest pace in more than a decade.
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