China's economic growth is expected to slow over the next 18 months as the pace of fixed-asset investment falls, a UN report said yesterday.
"A gradual slowdown is necessary because we have faced many, many challenges," Wang Huijiong, vice-chairman of the Academic Commission of the State Council Development and Research Center, authorized by the UN to deliver the report, told China Daily.
The UN Economic and Social Commission for Asia and the Pacific's annual report also noted that rising oil prices and the tsunami of December 26 had undermined some Asian economies.
It predicted China will register an annual economic growth rate of 8.5 percent this year, lower than last year's 9.5 percent, slowing to 7.8 percent in 2006.
The commission concluded that the economic slowdown in China will also affect the speed of economic development in the rest of the region.
China's economic growth for the first quarter of this year was 9.5 percent, higher than the government's goal of 8 percent.
Wang said the biggest challenge facing China's economic development is over hasty investment in the fixed asset market in the past several years.
"We must slow down our pace, otherwise our growth cannot be sustained because of strains on resources and inflation pressures," said Wang.
The report said China's economy has played a major role in driving sustained growth in the Asia-Pacific region with a GDP growth rate of 8.2 percent a year on average between 1998 and 2004.
In his foreword to the report, UN Secretary-General Kofi Annan said the fast pace of economic growth for countries in the Asia-Pacific region was driven by resilient exports and domestic demand.
"The prospects this year have been undermined in countries affected by the tsunami disaster and other factors," said Annan.
The commission forecasted that the region as a whole would achieve 6.2 percent economic growth this year, down from last year's 7.2 percent.
Looking to the long term, it warned that many countries in the region should pay close attention to the problems of an ageing population.
By 2050 about 23.5 percent of people living in the region will be aged 60 or above - 29.9 percent in China. Worldwide, the average rate is 21.1 percent.
"China's challenge of ageing is the biggest in the world," said Wang, urging the government to take efficient measures to cushion pressures brought about by its ageing society.
(China Daily April 26, 2005)