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Economist: China may attain 8%, or even higher growth this year
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15:47, March 03, 2009

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China may attain its targeted 8 percent economic growth, or even higher, this year, prominent Chinese economist Li Yining told Xinhua Tuesday.

The Chinese economy is also very likely to recover before other major economies, even though the world economy is still shrouded in uncertainty, said Li, a member of the 11th National Committee of the Chinese People's Political Consultative Conference (CPPCC), the nation's top political advisory body.

"The economic slowdown is beginning to bottom out, and the economy is bound to rebound on huge government investment," said Li.

According to a survey of factories issued Monday by the brokerage CLSA, China's manufacturing activity contracted for a seventh consecutive month in February, but at a slower rate than previous months.

"The growth may not be very high, but won't stay around six percent," Li said, "this year's growth could reach eight percent or even higher."

China's economic growth slowed to 6.8 percent in the fourth quarter of 2008, dragging down the annual rate to a seven-year low of 9 percent, as the unfolding global financial crisis takes a toll on the national economy.

Since last October, the government has announced several aggressive measures to bolster domestic demand and increase investment, including a 4 trillion yuan (585.5 billion U.S. dollars) stimulus plan, a plan to expand rural consumption of home appliances and support plans for key industries.

Li, who has been a political advisor for more than 20 years, said the attainment of a 8-percent growth would be decided by two factors: a boost in domestic demand and changes in the global economy.

The 8-percent growth was entirely within reach if domestic investment and consumption could be spurred to support the growth, he said.

"However, the developments of the global economy are not up to our country," he added.

The economist who had proposed the ongoing shareholding system reform in China also said the country should be able to see an early recovery.

"Our problems is not as complicated as in other countries," he said, "and China's focus on expanding domestic demand could foster future growth, although our exports may have to depend on overseas demands."

However, the country needed to enhance agricultural productivity so as to increase farmers' income and to put both rural and urban residents under the umbrella of the social security network before the domestic demand could take off, Li said.

"Farmers' contribution to the economy could be huge if their income are raised to a higher level, given the large number of farmers," he said.

Of China's total 1.3 billion population, more than 900 million are farmers.

"Reforms of the pension system, education and medical insurance should keep up with the economic growth to increase people's willingness to spend," Li added.

He said the public should have faith in the government's ability to stimulate the economy. "There is no doubt about that."

The 79-year-old economist said the fundamentals of the economy remained unchanged, and difficulties of exporters are results of a crisis originated outside the country.

"The country needed to promote innovation, industrial upgrade and economic restructuring in its efforts to bolstering the economy, and these measures could not only ensure the economic growth, but also improve the growth quality." he advised.

The professor with the Peking University said employment should be the country's top priority. The recovery of job creation is usually behind that of economic growth, he warned.

China said it aimed to create jobs for nine million people this year. "It is not an easy target, but the country is actively finding ways to make it happen," he said.

About 20 million of China's migrant workers have returned home after losing their jobs as the global financial crisis takes its toll on the economy.

Li also said the most important reform at the moment is the integration of rural and urban areas in order to solve pressing issues such as jobless migrant workers and rural development.

Source: Xinhua

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