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China to Moderate High-speed Economic Growth

The growth rate of China's economy is expected to lower to 6.7 percent next year, said Morgan Stanley economist Stephen Roach recently at Peking University.

"Although the estimation may be too conservative, the downward trend of China's economic growth is certain to come," he said.

Many Chinese and overseas economists have reached consensus on the upcoming slowdown of China's economic growth.

In the past few years, the rocketing export has become a robust driving force of China's economy, but in the near future, due to increasing trade disputes and international trade protectionism, the country will not be able to maintain a high-speed export growth.

Besides, China's macro-control policies have successfully decelerated the country's overheated investment growth, so economists believe the Chinese economy will enter a new stage characterized by stable rather than high-speed growth.

In 2003 and 2004, China's annual economic growth rate was 9.5 percent, and in the first three quarters this year, the figure was 9.4 percent.

The National Bureau of Statistics expected Chinese economy to grow at an rate between 8.7 to 9.2 percent next year, and in the next five years, the country's economy is expected to rise at an average rate of 8 percent.

Since China started its reform and opening-up policy more than 20 years ago, its economy has "overheated" or "overcooled" several times.

After some years of rapid economic growth of more than 9 percent, China is trying to restructure its economy by putting more emphasis on quality, rather than quantity.

Economists agree that the Chinese economy now faces two major problems, namely excessive dependence upon its exports and oversupply in some industries due to excessive investment.

The restructure policy will cool down China's booming economy, but it is unlikely for the economy to slump in the near future, because both exports and investment will maintain moderate growth, and the government will make more efforts to stimulate domestic consumption.

2006 may be a starting point for the country to overhaul its economy through discouraging overheated investment and stimulating consumption, said Wang Xiaoguang, a researcher with the National Development and Reform Commission.

The seasonal adjustment of the Chinese economy is not equal to economic recession in western countries, Wang said. The Chinese economy will continue to rise next year, with a growth rate slowing down to a moderate level, he said.

According to China's next five-year guidelines, the per capita gross domestic product in 2010 is expected to double from that in 2000, which means China has to maintain its annual economic growth above 7.5 percent.

The Chinese government, having adopted the concept of sustainable development, is now paying more attention to quality and efficiency in economic development, and regards stable and balanced growth as ideal.

(Xinhua News Agency November 30, 2005)

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