The International Monetary Fund (IMF) projected Wednesday that China's economy would continue growing strongly despite the heightened risks of deeper global downturn following the terror attacks in the United States.

The IMF projected China's economy to increase 7.5 percent in 2001, up from its previous forecast of 7 percent in May. That was in contrast with the downward revisions of the projections for the world economy and most major economies.

The IMF projected the world economy to grow by only 2.6 percent this year, down 0.6 percentage point from its May forecast of 3.2 percent.

"China is expected to continue growing strongly in 2001, in part because total exports, and especially exports of high technology goods, comprise a much lower share of GDP (gross domestic product) than in most other emerging Asian economies," the IMF said in its World Economic Outlook.

Although exports have slowed markedly in 2001, indicating that China is not immune to the global slowdown, overall activity remained strong in the first half of 2001, led by buoyant private consumption and strong public investment, the IMF said.

"China's near-term vulnerability to external shocks is also limited both by its high level of foreign reserves and by strong inflows of foreign direct investment, running at around 40 billion U.S. dollars a year since 1996 and showing a strong pickup in commitments over the past year," the report said.

The IMF said the key economic challenges facing China remain to strengthen the banking sector, move forward with enterprise restructuring, and over the medium term, strengthen the fiscal position to cover the costs of bank and corporate reforms and meet outstanding pension liabilities.

The IMF projected the country's economy would grow 7.1 percent in 2002.

(People’s Daily 09/27/2001)