Economists and entrepreneurs attending the Boao Forum for Asia
2006 expressed their optimism in China's macro-economic situation
on Sunday.
According to statistics issued by the National Bureau of
Statistics, China's GDP for the first quarter is 4331.3 billion
yuan (US$541.4 billion), up 10.2 percent over last year and higher
than the growth rate of 9.9 percent from the same period of last
year.
Li Deshui, former director of NBS, said China's high growth in
the first three months is closely connected to the current
situation of the global economy.
The International Monetary Fund (IMF) adjusted its forecast to
the economic growth of the United States in 2006 from 3.3 percent
to 3.4 percent, and that of Japan from 2 percent to 2.8
percent.
According to statistics, investment in fixed assets grew by 27.7
percent year on year to 1,390.8 billion yuan in the first quarter,
retail sales reached 1,844 billion yuan with a growth of 12.2
percent and the volume of foreign trade, up 25.8 percent to 371.3
billion U.S. dollars.
The strong growth of all the three major driving factors of the
economy have jointly contributed to the high growth in the first
three months, said Li.
Stephen Roach, managing director and chief economist of Morgan
Stanley, also said the 10.2 percent growth is within the normal
range, "I don't think this is an urgent problem that needs dramatic
clamping down," he said.
The global rapid growth has caused the central banks of the
United States, the European Union and Japan to discuss tightening
of monetary policies for the first time in the past 15 years, said
Roach.
With the slowing down of the global economy, the Chinese economy
is expected to cool down too, he said.
"You cannot call an economy overheated just because of soaring
growth over three months," said Li.
Admitting the existence of over-capacity in certain industries,
Li said the economy as a whole is still healthy.
China plans to reduce its GDP from an annual average of 9.5
percent in the past 25 years to 7.5 percent in the next five years
from 2006 to 2010 by improving economic quality and making domestic
consumption the major driving force for economic growth.
On one hand, China's rapid growth over the first three months is
encouraging because it is continuing. On the other hand, it is also
a little bit of a concern because it might indicate difficulties in
containing growth, said Eric Baden, Chairman of Degussa (China) Co.
Ltd.
Despite this, Baden said he is optimistic about China's macro
economy not only because of China's effectiveness in cooling down
the overheating in certain industries but also for the long-term
strategy to restructure the economy.
Chinese domestic market for consumer goods is undergoing a rapid
development. It makes China the most attractive market for Degussa
A.G., the world's largest speciality chemicals maker, said
Baden.
Roach with Morgan Stanley holds the same opinion. "The potential
of Chinese consumers could well be one of the greatest
opportunities for the global economy in the 21st century. Unlike
the earlier false hopes, this one seems to be real", he said.
(Xinhua News Agency April 24, 2006)