The Chinese economy is capable of annual growth of 7 to 8 percent in the coming two decades, said Li Deshui, commissioner of the National Bureau of Statistics.

Due to a nationwide effort, China has built solid foundations for further development, Li said Sunday at the China Economic Growth Forum 2003 in Suzhou, East China's Jiangsu Province.

Currently, the country's overall economic volume is sixth in the world, he said.

But when it comes to the output of many industrial and agricultural products such as coal, steel, cement and color televisions, the nation is in first place.

The country's foreign exchange reserves rank second in the world, he said.

Fred Hu, director and general manager of Goldman Sachs (Asia) Group Inc, said he has confidence that China's economy can maintain a fast development for a long time.

The fast investment expected in the coming decades resulted from the high savings deposits ratio in China would continue to have a great impact on the overall economy, he said.

Private investment would also become more active, due to recent institutional reforms, he said.

China has a total workforce of 700 to 800 million people and their skills have been improving, Hu said.

The relatively lower labor costs will make China-made products more competitive on the international market.

After decades of practice, the Chinese Government has accumulated rich experiences in managing the country's economy, Hu said.

The government successfully achieved a soft economic landing in 1996 after the economy became overheated in 1992-93.

In the face of the Asian financial crisis of 1997-98, the government decided to focus on expanding domestic demand.

The government carried out a pro-active fiscal policy and a sound monetary policy, which helped maintain steady economic growth, he said.

The government's commitment to an export-orientated economy and its attention to science and technology, and maintaining a stable social environment also provided excellent conditions for the country's fast and sustainable economic development, both Hu and Li agreed.

During the first nine months of this year, China's economy grew year-on-year by 8.5 percent, suggesting the country's economy has shrugged off negative influences such as SARS (severe acute respiratory syndrome) and flooding.

Hu and Li said they did not think the economy has become overheated, as the overall supply still outstrips the overall demand and the consumer price index - which grew 0.7 percent during the first nine months - is still at a low level.

By Li admitted the economy remained plagued by problems.

The difficulty in raising rural incomes that has been dragging at the economy for a long time, the relative large unemployment pressure and other contradictions are still prominent, he said.

Unbalanced development between investment and consumption, urban and rural development, and industrial output and energy had become more pronounced, he said.

A number of large projects such as the Three Gorges project and the project of transmitting electricity from west to east would provide favorable conditions for the country's sustainable and fast economic development, he said.

China boasts the largest population in the world, but people's living standards are still quite low.

"Any small demands from the country's 1.3 billion people would create a big market opportunity," he said.

(China Daily November 10, 2003)