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China's economy predicted to continue soaring

China's economy predicted to continue soaring
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China’s economy is likely to experience its sixth consecutive year of double-digit growth this year according to a major government research institute. But the State Information Centre – which is part of Beijing’s economic planning agency – predicts economic expansion will slow moderately due to official measures to cool growth.

One Hong Kong economic analyst said: “2008 is difficult to predict with so many uncertainties. For example, the US subprime problem and in China the economy could cool down, plus there are election in the US and Taiwan.”

The official forecast for this year is growth of 10.8% following on from an estimated 11.5% over the past 12 months.

Consumer price inflation in China is expected to remain near 10-year highs, at around 4.5% for all of this year, down from an estimated 4.7% in 2007. But producer price inflation – that is prices at factory gates – is likely to rise due to higher costs for energy, raw materials and labour.

The State Information Centre is also forecasting that China’s trade surplus will grow at a slower pace this year. That is due to overseas protectionist moves, uncertainty about the strength of the US economy, faster appreciation of the yuan, and Beijing abolishing export tax rebates.

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