A survey by investment bank, Goldman Sachs, shows that China's
higher income versus expenditure stands it in good stead for
healthy gross domestic product (GDP) and forex reserves growth in
2006, according to a report in Shanghai Security News on
January 23.
According to the survey, China's forex reserves are estimated to
surpass Japan's in the first financial quarter of this year, taking
it to the top of the world table.
GDP growth is expected to slow down this year and next, to 9.6
percent and 9.1 percent respectively, but these figures still
exceed previous estimations of 9.0 percent and 8.5 percent
respectively.
The survey suggests that the positive outlook for forex reserves
and GDP growth have to do with increased investor confidence in
China's economy, particularly as a result of the Chinese
government's policies aimed at adjusting the country's economic
structure.
However, despite optimism that China's development will maintain
its pace for the foreseeable future, there is concern that
imbalances within China?-- measured by factors including
import payments, expenditure and forex reserves?-- might have
an effect on the international situation.
China's favorable international trade balance in 2005 could
account for 4.6 percent of its GDP, while profits made from higher
income from exports versus expenditure for imports could increase
to 10 percent.?
Further, the survey predicts a continued rise in the value of
the?RMB in the next 12 months. Exchange rates are estimated to
appreciate by 9.87 percent, which could result in the RMB being
valued as high as 7.34 yuan to the US dollar.?
(China.org.cn by Wang Ke, January 26, 2006)