The Chinese economy will grow by more than 8 percent in 2010, despite lingering uncertainties in the global market, a leading Chinese economist predicted.
Fan Gang, director of the China National Economic Research Institute and a member of the money policy committee of the People's Bank of China, is confident that the country can meet its GDP growth target of 8 percent this year and will keep the momentum of the economic recovery next year.
He attributed the strong economic growth to the government stimulus package, rising investment in property and industrial sectors as well as a growing trade surplus.
China's 4-trillion-yuan ($585 billion) stimulus package, mainly on domestic investment and consumption, is shoring up the economy, with manufacturing showing more signs of recovery, according to the State Council, or Chinese cabinet .
"Investment in real estate so far this year has almost fallen to its lowest level for years," Fan said, "yet money has started to flow into this sector and will increase quickly next year, making it a significant source of GDP growth."
From January to July, property sales have soared 37.1 percent year on year. Investment growth in real estate development has accelerated from 1 percent in January and February to 11.6 percent in July, according to Liu Shijin, deputy director and senior research fellow at the Development Research Center of the State Council. He spoke at a meeting of National People's Congress yesterday.
Industrial enterprises, particularly in mechanics and chemical sectors, will resume investment in 2010, despite warnings of overcapacity among enterprises and manufacturers, Fan said.
The State Council on Wednesday vowed to "resolutely" curb overcapacity because the economy was still in a "critical period".
Restraints will be imposed on steel and cement output, as well as parts of the coal, glass and power industries, as Chinese economic growth rebounded to 7.9 percent in the second quarter and Japan, France and Germany exited recession.
Another contributor to the growth is trade surplus.
"Exports, expected to rebound at a low point, will resume their momentum next year," Fan said.
