Economists are divided on their predictions for China's economic growth in 2002 as the slowdown in the global economy persists.
Chen Dongqi, chairman of the Economic Research Institute under the State Development Planning Commission (SDPC), said he believed that gross domestic product (GDP) this year is likely to reach 7.5 percent - higher than the 7.3 percent expected for last year.
The government recently decided a target growth rate of about 7 percent this year while some international organizations believe 6.5 percent is a more likely target. "I don't want to play down China's economic growth potential in the years to come," Chen said.
Economic forecasts for China went on an upward spiral from 2000 following an eight-year adjustment period from 1993, when it registered 7.1 percent growth. The 1999 GDP rate was also 7.1 percent and that of 2000 was 8 percent.
"But, because of the terrorist attacks on the United States on September 11, the increase has been interrupted," Chen said. "Fortunately, the interruption will not last long."
Chen said the current world economic difficulty resulted from a bubble generated by the new economy based on information technology.
"Now developed economies including the United States are squeezing the bubbles and it is a difficult period," Chen said, adding governments across the world are considering new strategies to get through present difficulties.
"So, from an external point of view, we still have no reason to feel too depressed," Chen said.
Internally, Chen based his optimistic prospects on increasingly active private and foreign investment propelled by the government. In addition, the government will step up any necessary measures to bolster domestic consumer confidence.
But Wang Jian, a macroeconomics expert at the commission, was downbeat about China's economic performance in the future.
"If the developed economies are still in recession, China's GDP growth rate will continue to drop this year," said Wang, deputy secretary-general of the China Macroeconomics Academy.
Despite not having an export-dependent economy, China recorded a decline of quarterly exports last year and its GDP embarked on the same downward track.
"Last year's decline in export was caused by the worsened global economic situation. This year, the world economic expectations are even lower and that resulted in my downbeat judgment," Wang said.
The World Bank and International Monetary Fund recently forecast that the global average growth rate was likely to plummet to 1 percent this year. A benchmark rate of less than 2 percent is a sign that an economy is in recession.
"So we need to change policies to drive our economy forward," said Wang. Wang suggested the State should pay more attention to meaty measures to further unlock the consumption potential of the Chinese people.
"That's one shift because in recent years, the State has mainly focused on fiscal investment," said Wang. "We need more fiscal investment in some major public projects, but monetary measures should be top priorities in the years to come, because various goods in China are still oversupplied."
The recent survey conducted by the State Economic and Trade Commission revealed about 600 essential goods in China are oversupplied next to present market demand.
(China Daily January 4, 2002)
