NDRC's Chen: Asset bubbles won't burst in China
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China won't see fluctuations in domestic asset prices or an asset bubble burst, said Chen Dongqi, vice president of the Academy of Macroeconomic Research, a think tank under the National Development and Reform Commission.
No second recession
Recently, some economic experts have said China may see another recession or even an economic collapse in the near future.
But Chen's forecast shows that China's GDP will grow by at least 10 percent in 2010. "I don't think there is a second recession ahead for China," Chen said.
China's major economic indicators have been gradually recovering. The year-to-date growth of industrial added value has risen from 3.8 percent last February to 20.7 percent this February, Chen said. He predicted that this growth rate could reach 18 percent or higher in 2010. Also, the Manufacturing Purchasing Manager Index remains above 50 percent, indicating an overall expanding economy.
Commodity prices stable and controllable
Chen predicted that the consumer price index can be stabilized at a controllable level this year. But he sees more inflationary risk in 2011 and 2012.
China's grain output has been increasing for six consecutive years, giving the country abundant grain reserve. Meanwhile, the supplies of poultry, meat and durable consumer goods remain ample. Although the ongoing drought in southwest China adds some uncertainties, the country won't see short supplies of grain and durable commodities, Chen said.
Asset bubbles won't burst
There are some structural bubbles in China's real estate market, Chen said, adding that the key problem with the current property market is the accelerating housing price growth. But the government's tight monetary policies in recent months will gradually show their effects on curbing housing prices, he said.
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