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| 2007 GDP Forecasts Revised After Strong Start |
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With China's economy performing well out of the starting blocks in 2007, a number of international economic research institutions have been forced to review their forecasts for China's gross domestic product (GDP) growth this year. Despite original predictions to the contrary, almost all major economic indexes for the first two months of 2007 have surpassed their fellows for last year. "The country's GDP growth in the first quarter will be faster than that seen at the same time last year and that seen in the previous quarter," announced Chen Dongqi, deputy director of the National Development and Reform Commission' Institute of Economic Research. The State Information Center has shown the way, by revising its GDP growth forecast upwards for the first quarter from 10.2 percent to closer to 11 percent. Despite a series of economic control measures implemented last year, the expected slowdown has shown no signs of occurring as economic growth continued apace in January and February. Statistics show that urban fixed-asset investment rose slightly by 23.4 percent year-on-year, or by 20 percent as compared to the last quarter, confirming the reversal of a slowdown originating from last July. Meanwhile, the trade surplus rocketed up by 230 percent, with retail sales enjoying a bullish 14.7 percent rise over Jan-Feb 2006. "Industrial growth is a key driving force behind overall economic growth, and power generation is also a useful indicator," Chen said. According to the National Bureau of Statistics, China's industrial output climbed 18.5 percent while industrial profits soared 43.8 percent in the first two months. The rise seems to have targeted all areas with power generation growth moving up to 16.6 percent year-on-year when it languished at under 14 percent in the same period last year. Even news that more state-controlled tightening measures will soon be launched could not stop Lehman Brothers, a global investment bank, from revising their annual forecast. According to a recent report by the firm, their forecast for first quarter growth now stands at 10.1 percent from 9.8 before. Their annual forecast has risen marginally from 9.6 percent to 9.8. "In the light of the stronger-than-expected figures in the first two months of this year and the likely policy responses, we have lifted our full-year growth projections for this year to 10 percent from 9.1 percent, based mainly on stronger growth in credit, investment and exports," Qu Hongbin, HSBC's chief China economist, revealed. Domestic banks also saw a brusque pace of loan business with 982 billion yuan (US$127 billion) being granted in the first two months of this year, up from 716 billion yuan (US$92 billion) in the same period for 2006. Earlier predictions from the government had estimated GDP growth this year to hover around 8 percent. China has now seen four consecutive years of double-digit growth, including 10.7 percent in 2006, the fastest in a decade, a trend which may not be showing any sign of slowing The latest official forecast stated the authorities' directive to shift economic scope from being quantity-oriented to a quality-driven one. (China Daily April 2, 2007) |
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