With China's economy performing well out of the starting blocks
in 2007, a number of international economic research institutions
have been forced to review their forecasts for China's gross
domestic product (GDP) growth this year.
Despite original predictions to the contrary, almost all major
economic indexes for the first two months of 2007 have surpassed
their fellows for last year.
"The country's GDP growth in the first quarter will be faster
than that seen at the same time last year and that seen in the
previous quarter," announced Chen Dongqi, deputy director of the
National Development and Reform Commission' Institute of Economic
Research.
The State Information Center has shown the way, by revising its
GDP growth forecast upwards for the first quarter from 10.2 percent
to closer to 11 percent.
Despite a series of economic control measures implemented last
year, the expected slowdown has shown no signs of occurring as
economic growth continued apace in January and February.
Statistics show that urban fixed-asset investment rose slightly
by 23.4 percent year-on-year, or by 20 percent as compared to the
last quarter, confirming the reversal of a slowdown originating
from last July.
Meanwhile, the trade surplus rocketed up by 230 percent, with
retail sales enjoying a bullish 14.7 percent rise over Jan-Feb
2006.
"Industrial growth is a key driving force behind overall
economic growth, and power generation is also a useful indicator,"
Chen said.
According to the National Bureau of Statistics, China's
industrial output climbed 18.5 percent while industrial profits
soared 43.8 percent in the first two months.
The rise seems to have targeted all areas with power generation
growth moving up to 16.6 percent year-on-year when it languished at
under 14 percent in the same period last year.
Even news that more state-controlled tightening measures will
soon be launched could not stop Lehman Brothers, a global
investment bank,? from revising their annual forecast.
According to a recent report by the firm, their forecast for
first quarter growth now stands at 10.1 percent from 9.8 before.
Their annual forecast has risen marginally from 9.6 percent to
9.8.
"In the light of the stronger-than-expected figures in the first
two months of this year and the likely policy responses, we have
lifted our full-year growth projections for this year to 10 percent
from 9.1 percent, based mainly on stronger growth in credit,
investment and exports," Qu Hongbin, HSBC's chief China economist,
revealed.
Domestic banks also saw a brusque pace of loan business with 982
billion yuan (US$127 billion) being granted in the first two months
of this year, up from 716 billion yuan (US$92 billion) in the same
period for 2006.
Earlier predictions from the government had estimated GDP growth
this year to hover around 8 percent. China has now seen four
consecutive years of double-digit growth, including 10.7 percent in
2006, the fastest in a decade, a trend which may not be showing any
sign of slowing
The latest official forecast stated the authorities' directive
to shift economic scope from being quantity-oriented to a
quality-driven one.
(China Daily April 2, 2007)