A group of 14 research institutions jointly predicted over the weekend that China's economic growth for the first quarter would be 10.4 percent to 10.5 percent, while the consumer price index (CPI) would be 6.8 percent to 7.1 percent.
The 14 institutions included the State Information Center, a government think tank, the research center of Chinese economy under the Peking University, and the research center of China and world economy under the Tsinghua University.
Economists involved believed that China still faced high inflationary pressure and that the global slowdown would affect the country insignificantly.
Zhu Baoliang, deputy head of the prediction department of the State Information Center, said on Monday that China's industrial production, investment, consumption and import and export, particularly production of farm produce, such as vegetables and meat, would be affected to different degrees by the recent severe winter weather. The result would be price rises in the coming few months, Zhu added.
CPI, the major inflation indicator, will rise more than 5 percent for the whole of 2008, according to Zhu, who forecast that prices of primary products would soar conspicuously.
The Chinese economy increasingly relies on international markets and resources and is responsive to price rises worldwide. There is around the globe mounting demand for primary products, such as petroleum, farm produce and minerals. Prices of such products are also shored up by depreciation of the U.S. currency, speculation and other factors such as geological politics, according to Zhu.
Lin Yifu, head of the research center of Chinese economy under the Peking University, said the U.S. economy would likely slide into stagnation upon the subprime mortgage crisis, which affected China's financial sector insignificantly as Chinese banks bought less subprime assets.
Though the United States is China's second largest trade partner, recession there will have a lesser impact on Chinese exporters, who sell mainly lower-end products, than it would on exporters from developed nations, who sell mainly high-end and investment products, according to Lin.
(Xinhua News Agency February 25, 2008)