IIF Foresees 7 Percent Growth in China's Economy

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Last updated at: (Beijing Time) Sunday, May 12, 2002

IIF Foresees 7 Percent Growth in China's Economy

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The U.S.-based Institute of International Finance (IIF) has predicted that China's economy will maintain an annual growth rate of seven percent in the coming years thanks to flexible policies and robust domestic and overseas demand.

The sustained and rapid expansion of China's economy is vital to the future economic performance of the Asia-Pacific region, says the IIF in its report on Asia's economic outlook, which was released Saturday during the ongoing 35th annual board meeting of the Asian Development Bank.

Despite imbalances in its economic structure, China's accession to the World Trade Organization will help draw huge amounts of foreign investment and will bring about a rapid development of its productive forces, the report says.

It predicts that China's export will increase 12 percent and 20 percent respectively in 2002 and 2003, compared with last year's seven percent.

China's current account surplus, it says, will rise slightly to 20 billion U.S. dollars this year, but will fall to 11 billion dollars in 2003 as a result of increasing imports after the country's WTO accession.

Sustained increase in foreign direct investment into China will bring the country's foreign exchange reserves up to 293 billion U. S. dollars by the end of 2003 from 231 billion dollars in March this year, the report says.

It foresees economic recovery for all the emerging Asian markets amid the global economic upturn, saying that improved balance of payments in most Asian economies have offered greater potentials for the regional economic growth.

Meanwhile, the report points out that all Asian economies should push ahead with structural reforms in order to maintain faster growth.

Sluggish recovery in electronics and the sustained recession of the Japanese economy, the report warns, may hinder overall growth of the regional economy. Further devaluation of the Japanese yen may even trigger risks and endanger regional stability and economic growth, it adds.

"IIF has called on governments and authorities of Asia's emerging markets to put financial reform as a priority in their work," Liu Mingkang, Bank of China president and IIF vice-chairman, said as he was outlining on the IIF report.

He said the IIF has set up a special committee to help the emerging markets prevent potential crises and seek solutions to existing ones, and has released rules to help them achieve proper corporate governance.

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