Reuters | Thu Jul 22, 2010 | 10:22am IST
China is expected to maintain strong growth in the rest of this year and there is no need for a second stimulus, government economists said in remarks published on Thursday. The State Information Center, a think tank under the National Development and Reform Commission, forecast economic growth of 9.5 percent this year, which would be close to the average for the past 30 years and reflect China’s reasonable growth potential, the official China Securities Journal reported. Last November, the centre said it expected the Chinese economy to grow 8.5 percent in 2010 and it repeated that forecast in December. Separately, Wang Yiming, deputy head of the Academy of Macroeconomic Research, also under the powerful economic planner, told the official People’s Daily overseas edition that he expected growth of 9.5-10 percent this year and warned against upside risks of consumer inflation in the second half.
A Reuters poll of economists earlier this month produced a median forecast of 10 percent, but the survey was conducted before the release of second quarter GDP and June output data that came at the lower end of forecasts. China’s growth moderated to 10.3 percent in the second quarter from 11.9 percent in the first quarter as Beijing steered monetary and fiscal policy back to normal after a record credit surge to counter the global crisis. Consumer inflation also eased to 2.9 percent in the year to June, from 3.1 percent in the 12 months to May. The slowdown has fuelled market expectations that Beijing might ease off its tightening of policy or even announce new stimulus measures. However, Yi Xianrong, a prominent researcher with the Chinese Academy of Social Sciences, a top government think tank in Beijing, disagreed.
"The direction of China’s macro-economic growth will not reverse and the government should not introduce new policy to stimulate the economy," he wrote in an article published in the Financial News, which is run by the central bank. "It’s enough to maintain the stability and continuity of policy introduced in the first half," he said. China’s Commerce Minister, Chen Deming, said the government would maintain its consumption stimulus in the second half and take an even longer view in its efforts to promote more domestic consumption. Yi said the tightening campaign in the first half, including restrictions on multiple home purchases and loans for new projects, had successfully reined in excessive housing price rises and the rapid pace of loan growth after a record lending of 9.6 trillion yuan last year. If China is firm in its determination to curb speculation in the real estate market, the country’s economic structure will improve, laying a more solid foundation for long-term growth, Yi said.