China's economy is to grow at 7 percent in 2002 and 7.4 percent in 2003 which will make it one of the best-performing economies in Asia, senior officials with the Asian Development Bank said on Tuesday.
The robust economic growth is mainly fuelled by buoyant consumer spending and China's accession to the World Trade Organization (WTO), according to the Asian Development Outlook (ADO) 2002, an annual publication analyzing and forecasting economic trends in the Asia-Pacific region.
"The world's economy is now much better than we predicted several months ago, as major powers have begun to rebound from recession, creating a better external environment for China's economic growth," said Tang Min, chief economist with the bank's China Resident Mission.
He said a gradual and moderate recovery in the United States' economy is benefiting other economies worldwide, including the euro zone, Japan, and other parts of Asia.
After a turbulent 1997-2001 period, Asian countries are returning to a more sustainable pace of economic growth this year and next.
The ADO reports average gross domestic product (GDP) growth in the Asia Pacific Region is projected to rise to 4.8 per cent this year and 5.8 per cent in 2003 from 3.7 per cent posted last year.
And in East Asia, economic performance is expected to strengthen, with GDP growth projected to rise to 5.2 per cent in 2002 and 6.2 per cent in 2003 from 3.9 per cent in 2001, said the report.
With the recovery of the global economy on the horizon, Tang said China's exports are projected to grow 6 per cent and 10 per cent in 2002 and 2003 respectively.
This is expected to provide more stimuli to the country's economic upswing in the coming two years, compared with a negative 0.6 per cent contribution made by China's foreign trade last year.
Zhuang Jian, another senior economist with the bank, said on Tuesday that China's industrial and services sector would grow by 7-9 per cent and agriculture by 2-3 per cent over the next two years.
But inflation is forecast to be 1-2 per cent due to excess capacity in several sectors, an expected oversupply in agriculture and cheap imports after WTO-related tariff liberalization.
The country's imports are likely to grow faster than exports, which will lead to a reduced trade surplus in line with China's WTO accession, Zhuang predicted.
Referring to China's fragile farming sector that is to see tough challenges in the years to come, Bruce Murray, resident representative of ADB in China, suggested the country should continue transforming its resource-intensive agriculture.
It should develop more value-added models to combat the fierce challenges China's WTO membership will bring and create more jobs for farmers in small towns and cities.
However, they also suggested the country make earlier preparations for some uncertainties and possible external risks, including a reduced US appetite for imports, rising oil prices and a short and weaker global recovery, in a move to back up sustainable economic growth.
(China Daily April 11, 2002)