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People's Daily Online>>China Business

Uncertainties cloud China's economy in 2012

(Xinhua)

09:25, January 17, 2012

BEIJING, Jan. 16 (Xinhua) -- A slowdown is expected for China's growth engine in 2012 as uncertainties continue to cast clouds over the world's second largest economy amid festering European debt woes and painstaking macro-control policies.

The country's release of economic data for the fourth quarter of 2011 will take the spotlight on Tuesday, with many analysts expecting economic growth below 9 percent, the slowest in 10 quarters.

A slowing Chinese economy is inevitable due to weaker exports and fixed-asset investment, said Lu Zhongyuan, deputy director of the Development Research Center (DRC) of the State Council, or China's Cabinet.

"We should no longer be obsessed with the speed of growth," said Lu, who predicted the expansion of China's gross domestic product (GDP) would decelerate to around 8.5 percent in 2012.

While short-term demand shrinks, China's mid- and long-term growth potential will decrease because of factors such as an aging population, rising labor costs and less room for infrastructure improvement, said Yu Bin, director of the DRC's Macroeconomic Research Department.

Yu also estimated the 2012 GDP growth will slow to around 8.5 percent, based on an overall stable domestic property market and barring another global financial crisis.


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