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People's Daily Online>>China Business

Economic growth set to fall

By Lan Lan (China Daily)

08:55, December 27, 2011

BEIJING - China's economic growth is expected to fall to about 8.5 percent in 2012, but only if the ongoing eurozone debt crisis doesn't evolve into a new global economic meltdown, a senior economist of the State Council's policy research think tank said on Monday.

In an exclusive interview with China Daily, Yu Bin, director-general of the department of macroeconomic research at the Development Research Center of the State Council, said that economic growth is likely to dip below 9 percent in the fourth quarter, but full-year growth may be slightly higher.

"Eastern coastal cities saw obviously slower economic growth in 2011. Meanwhile, the potential for additional investment in infrastructure continues to shrink, signaling that the potential for economic growth has started to decline," said Yu.

China has entered the final stages of high-speed economic growth after three decades of rapid expansion, said Yu, adding that the economy is under pressure, caused by short-term sluggish demand overlapping with a slower potential growth rate in the medium and long terms.

Emerging economies, often seen as the engine of the global economy, are incapable of "unhooking" their connection with the dismal economic situation facing developed economies, influenced by market fluctuations and deteriorating environments for exports and asset fluidity.

China's export growth is forecast to decline to about 10 percent in 2012, from about 20 percent this year, Yu said. The nation's exports to the European Union, its biggest market, have seen a rapid slowdown since September.

Fixed-asset investment growth may fall by about 4 percentage points to 20 percent in 2012, said Yu. The relatively high growth rate seen this year has been largely driven by the high-speed growth of the manufacturing and real estate industries, which account for about 60 percent of fixed-asset investment.

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