China's economic momentum to continue as inflation is controllable this year

Xinhua, January 23, 2011

China's economic growth is expected to maintain its relatively fast growth as the nation will be able to keep inflation manageable, a leading government think tank said Saturday.

Experts with the Chinese Academy of Sciences (CAS) forecast that the country's economy will first grow at a faster pace this year before it eases, as domestic demand will be a major force to drive growth.

Investment growth will likely quicken while the growth rate in exports and imports will slow compared to last year, CAS experts said in an annual report released Saturday forecasting China's economic growth.

"Inflation is still the biggest obstacle facing China's economic growth this year," said Yang Xiaoguang, a senior expert with the CAS.

China's consumer price index (CPI), the main gauge of inflation, rose 4.6 percent in December year-on-year and 3.3 percent for the whole of 2010, breaking the government's 3 percent inflation ceiling.

But Yang said a severe and prolonged inflation would not likely occur this year because the overall supply of agricultural produce is stable and the value of the Chinese currency is rising, which would reduce prices of imports.