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People's Daily Online>>China Business

Risks to GDP growth rising (2)

By Gao Changxin (China Daily)

10:17, December 29, 2011

The International Monetary Fund said in September that the global economy would expand 4 percent in 2012, with developed countries growing only 1.9 percent.

Slow global growth would hurt China's exports, which mainly go to developed countries, the bank said. It forecast that exports would grow 13 percent next year to generate a trade surplus of only about $82.3 billion.

The trade surplus in the first 11 months of this year reached $138.4 billion, down 18.2 percent year-on-year, according to the Ministry of Commerce.

"China's exports face huge pressure and growth will further slow next year," said Zhen Feng, an economist with the Bank of China. "Net exports will contribute less to economic growth, or even make a negative contribution."

Chinese enterprises would start de-stocking next year after having quickly expanded production over the past two to three years, which would slow industrial activity and growth, said the bank.

Inventories of industrial enterprises surged 24.2 percent in the first 10 months of this year to 2.75 trillion yuan ($434.7 billion), a six-year high.

The National Bureau of Statistics has reported that the profit growth of industrial enterprises in the first 11 months of the year decelerated to 24.4 percent from 25.3 percent in the first 10 months.

De-stocking, the bank said, would have "important effects" on employment and industrial output.

Tightening policies aimed at the real estate sector, which plays a significant part in the economy, wouldn't change next year, and a sluggish property market would have negative effects on fiscal revenue and related industries, the bank said. The bank said credit tightening earlier this year had successfully reined in consumer inflation, which would continue to slow to reach 3.5 percent in 2012 - down 1.9 percentage points from this year.

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