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Growth Goal Likely as WB Lowers China's GDP
The World Bank (WB) Friday said it believes China is capable of meeting its growth target this year, although it lowered its 2001 forecast for the country.
In an economic assessment report, the bank expected China's gross domestic product (GDP) to grow by 7 per cent this year, compared to the originally predicted rate of 7.3 per cent.
The bank expected China's exports growth to dwindle in the second half of the year in the light of slowing global demand but it said high investment and strong private consumption will still support a favorable economic outlook in China.
A weaker-than-anticipated global demand in the second half of the year was in the bank's sight before the September 11 attack on the United States, which will, obviously, lead to an accelerated slowdown, it said.
However, the report stated: "World Trade Organization (WTO) accession and the 'Olympic effect' are expected to have positive effects on investment and expectations (in China), more than enough to offset the negative global effects that are expected to flow from the September 11 incidents.''
China is set to join the WTO towards the end of the year and it has won its bid to host the 2008 Olympic Games.
Against a gloomy world backdrop, China has been praised by economists as serving as the beacon for East Asia.
Export growth and the booming high-tech sector have been acting as engines for most East Asian economies. In the current hard times and in the wake of a technology sector bomb, the growth rate decline in these economies have been drastic.
The WB said China's resilience comes from its vast internal market and low dependence on the high-tech sectors.
The nation's four-year-old expansionary fiscal policy, at the core of which is the government's massive investment in infrastructure, was a great contribution, the bank said, adding that the government is likely to continue with the proactive fiscal policy to counter the unfavourable external factors.
Source: China Daily
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