China's Gross Domestic Product (GDP) is projected to grow by
10.2 percent to reach 27.93 trillion yuan (US$3.88 trillion) in
2008, and the consumer price index (CPI) is to jump by 4.4 percent,
according to a report by the country's major think tank.
The report, issued on Friday by the Chinese Academy of Sciences
(CAS), predicted China's economy would continue to enjoy strong
growth, driven by the favorable economic environment.
However, the report said, the growth would be slowed down by the
fluctuating prices of resource commodities in the global and
domestic markets, as well as long-standing systematic problems of
China's economy.
Yao Jingyuan, the chief economist of the National Bureau of
Statistics (NBS), said that China's GDP is to grow by 11.5 percent
in 2007.
The CAS report echoed previous predictions that the world's
fastest growing major economy is likely to expand at a slower rate
in 2008 than it did the previous year.
The State Information Center (SIC) predicted a week ago that
China's GDP growth would slow to 10.8 percent in 2008.
The academy also predicted a 4.4 percent rise of the consumer
price index (CPI) for this year with economic tightening measures
taking effect.
But it warned the index could rise to 5.8 percent if the
government fails to work out effective control policies.
In 2008, the inflation pressure will continue to mount up, said
the report issued by the Center for Forecasting Science of Chinese
Academy of Science (CAS) here Friday.
In the first 11 months of 2007, the CPI grew 4.6 percent,
according to the National Bureau of Statistics (NBS).
And the annual figure is estimated to stand at 4.7 percent, far
higher than the government-set alarm level of 3 percent.
The report attributed the risks to huge demand of capital goods
fueled by fast economic growth, the expanding imbalance of
international payments, high prices of natural resource commodities
in the domestic and international markets, increasing money supply
and soaring housing price.
The CAS experts suggested that, besides the macroeconomic
policies already in operation, the country should ensure the food
supply to deal with the price hikes at the source.
It should be done to improve the state stock of commodities and
speed up tax reform policies on natural resource commodities such
as oil and natural gas, the report said.
A healthy real estate market will also contribute, it said.
With effective measures, the CPI growth is likely to slow down
in June or July, according to the report.
Taming inflation has been a red hot issue in recent months. The
country announced in late December a tight monetary policy for the
first time in the past ten years and the central bank increased the
interest rates six times last year.
The CAS report also predicted that the primary, secondary and
tertiary industries will expand at 4.1 percent, 12 percent and 11.5
percent, respectively.
Housing prices to keep rising
The CAS report?predicted that housing prices in China would
keep on rising this year and the increase rate would roughly equal
that of 2007.
The sale of residential buildings this year would hit 697.99
million square meters, up 2.24 percent year-on-year, according to
the report.
The real estate market would maintain a "good momentum," and
investment in the property sector would reach 2.54 trillion yuan
(about 347.5 billion yuan), the report said.
The total floor space of "completed" buildings would drop 8.2
percent to 1.9 billion square meters in 2008, leading to a further
dwindling of the housing supply, said the report, noting that the
imbalance between supply and demand would be aggravated.
From January to November of 2007, housing prices in 70 major
Chinese cities jumped 7.3 percent year-on-year. Housing prices were
up at a rate of 10.5 percent in November alone, a report by the
Chinese Academy of Social Sciences (CASS) showed.
The November rate was the highest monthly gain since July 2005
when the monthly housing price survey was started.
(Xinhua News Agency January 12, 2008)
