China's Economy to Grow at 8 Percent in 2006: Economists

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Last updated at: (Beijing Time) Tuesday, September 03, 2002

China's Economy to Grow at 8 Percent in 2006: Economists

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The Chinese gross domestic product (GDP) was forecast Tuesday to enjoy an annual growth of between 7.5 and about 8.3 percent between 2002 and 2006, while the world economy is striving to climb from about minus 2 percent.

The forecasts were made by economists at a two-day regional strategic forecast conference held by the Economist Corporate Network and attended by 200 business leaders Tuesday.

Compared to China, the world economy was forecast to grow at about 4 percent in 2006 - slowed down by sluggish growth of the economies of the United States, Europe and Japan.

Robin Bew, the network's chief economist, told the conference that the US economy, in particular, suffered a catena of corporatescandals and equity market slump, that have hampered economic recovery, while Europe suffers from the danger of entering a double-dip recession.

Vice President and Director of the network for China Lois Dougan Tretiak said China's growth is particularly driven by increasing consumption spending and exports, and stable investment.

"Consumer spending is rising in China, as unemployment falls, and China's welfare net is perceptibly stronger," Tretiak remarked, estimating that the annual consumption spending will grow by about 7 percent in 2006.

Annual exports will increase by about 13 percent in 2006; annual investment, about 12.5 percent; and annual inflation rate, around 2.5 percent in 2006, according to a forecast chart presented by Tretiak.

She stressed that she has every confidence that future Chinese government officials will continue to be committed to China's World Trade Organization commitments and will maintain China's political and economic stability.

The Chinese economy will also see the financial industry experience changes as new financial instruments widen business options, she said.

Forecasting for the nearer term, she said estimates for the annual GDP growth for the years of 2003 and 2004 are 7.9 percent and 8 percent.

Connie Bolland, a Hong Kong-based regional economist for the network told the media that China's performance remaining strong is good news for the economy of the Hong Kong Special Administrative Region.

She said the current challenge for Hong Kong is to evolve a complementary growth model whereby it can both lead and gain from China's growth drives, especially in South China.

"More cross-border economic liberalization can facilitate such growth. The local business community...should not forget about China's vast potential as Hong Kong's market and business partner," she said.

The Economic Corporate Network service is offered by the Economist Group, publisher of the Economist newspaper.

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