The National Development and Reform Commission (NDRC) said on Friday the snow plaguing southern China would not affect the country's pre-determined macroeconomic control policies.
The key of the macroeconomic control of the government this year would remain the prevention of an overheated economy and guarding against a shift from structural price rises to evident inflation, NDRC spokesman Li Pumin said at a press conference in Beijing.
"Winter storms have affected the economic and social development in snow-hit areas, but would not impact the sound economic growth momentum of the country."
The commission held that despite shortages and price rises of vegetables caused by transport problems in some snow-hit provinces, prices would stabilize as production gets back to normal and supplies increase.
The NDRC's bullish stance was backed by experts. Fan Jianping, a senior economist with the State Information Center, a key governmental think tank, told Xinhua on Friday that the country's gross domestic product (GDP) would possibly grow at a rate of 10.5percent for 2008 according to his prediction.
Fan Gang, director of China's National Institute of Economic Research, said earlier this month that the snow havoc had "taken a toll on the Chinese economy" but the impact would dissipate over the full year.
He held that the long snow spell would actually stimulate investment, including upgrading the power grid nationwide and improving coal infrastructure.
"The domestic market also has great potential to spur economic development. There is no doubt that such a big economy will encounter various difficulties each year, but the Chinese economy is maintaining stable growth momentum," said Fan. He disputed the views of some analysts that the snow would be a major drag on growth.
Li Huiyong, a senior macro-economic analyst at Shenyin and Wanguo Securities, forecast the country's GDP growth for the first quarter of 2008 would be around 10.1 percent, 0.5 point lower than an earlier prediction. This was due to slower growth in exports, investment and industrial production.
Winter storms have plagued the country's south since mid-January, leading to widespread traffic jams, blackouts and crop loss.
According to the latest official statistics, snow-related catastrophes killed 107 people and caused 111.1 billion yuan (US$15.45 billion) in direct economic losses. In all, 21 provinces, autonomous regions and municipalities have been affected.
(Xinhua News Agency February 16, 2008)