The latest edition of the Economic Blue Book, compiled by the
Chinese Academy of Social Sciences, has been published. Titled
Analysis of China's Economic Prospects—2005 Spring
Edition, it forecast key macroeconomic indicators as well as
trends and problems in economic development for this year.
It said the economy would grow 8.9 percent this year, higher
than the central government's expected figure of 8 percent, but
that lower GDP growth would, to a certain extent, help to control
unstable and unhealthy factors, adjust economic structure and
improve weaknesses.
Added value in agricultural, industry and service sectors will
see lower growth, with rates of 5, 10.4 and 7.6 percent
respectively. Slowing growth in the agricultural sector would be
due to its higher benchmark, while that in the service sector would
be held back by slowed GDP growth, the report said.
Added value in heavy and light industries is expected to grow
10.9 and 9.7 percent, both of which are lower than that of last
year. Heavy industry should grow faster than light industry, which
indicates that the economy is still in a climbing phase of the
economic cycle.
The report said total fixed-asset investment in 2005 would reach
8.4 trillion yuan (US$1 trillion), with an actual growth rate of
14.9 percent and nominal growth rate of 20.4 percent. It still adds
impetus to macroeconomic growth despite a slow down.
The ratio of fixed-asset investment to GDP, about 54 percent
this year, will reach a new high, and the report warned that
special attention should be given to it.
Commodity prices are expected to continue to rise. The indexes
of retail, consumer and investment prices would grow by 2.4, 3.4
and 4.8 percent respectively, the report said.
The average disposable income of urban residents was predicted
to grow 7 percent, while growth of farmer’s net incomes would
remain at 5.5 percent, the second highest in recent years.
Steady consumption would also be an important stimulus for
macroeconomic growth, said the report. The total consumer retail
volume is expected to reach 6.1 trillion yuan (US$734.5 billion),
with an actual growth rate of 10 percent and nominal growth rate of
12.7 percent. These would basically be the same as the first half
of last year.
Most international institutions have forecast that world
economic growth and trade volume would rise in 2005. This would
facilitate the rapid growth in China's foreign trade, the report
said. It forecast that imports and exports would grow 28.6 and 29.4
percent respectively. Also, the trade surplus this year would
continue to increase.
(China.org.cn by Tang Fuchun April 30, 2005)