Not too worried over World Bank outlook
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China's economy will grow at the slowest pace in a decade next year, with gross domestic product increasing 8.5 percent in 2011 from this year's 9.5 percent, according to forecasts by the World Bank released Tuesday.
In fact, the slower expansion is what China expects as the country is embarking on a route which places people's wealth ahead of a growth-at-all-expense model, observers said.
The Washington-based bank said the moderating pace of China's economic expansion reflects the fading impact of the stimulus package and the normalization of monetary policy, according to its latest East Asia and Pacific Economic Update.
Its forecast was the same as the prediction made in its China Quarterly Update released in June.
"The key drivers of growth have changed since the end of 2009," the report said. "Investment slowed, as a pickup in real estate investment offsets only partly a substantial weakening of government-led investment."
China's economy expanded 11.1 percent in the first half of this year, well above the bank's forecast of 9.5 percent for 2010.
The third-quarter key economic data will be released on Thursday and analysts forecast a GDP growth rate of between 9 percent and 9.5 percent.
But experts said the expected slower growth may be good for China.
"China should tolerate slower economic growth as the country needs to adjust the structure of its economy after 30 years of high expansion," said Zhu Baoliang, chief economist at the State Information Center, a research unit under the State Council, China's Cabinet. "We need to make efforts to expand domestic demand and stabilize overseas demand so as to keep economic growth at a stable level."
China is emphasizing more on improving people's living standards over demand for rapid economic growth.
China's next five-year development plan from 2011 will raise the income and spending power of hundreds of millions of farmers and workers, with government leaders vowing a more balanced income distribution, better healthcare and a stronger social welfare net.
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