China hopes for 10% economic growth, 3% inflation in 2010
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It would be a "good result" for China's economy if the country could achieve a growth rate of around 10 percent and around 3 percent rise in consumer prices this year, Chinese statistics chief said Wednesday.
Ma Jiantang, director of the National Bureau of Statistics, made such remarks at the ongoing World Economic Forum Annual Meeting of the New Champions in north China's port city of Tianjin.
The growth in China's gross domestic product (GDP) slowed to 10.3 percent in the second quarter from 11.9 percent in the first quarter, triggering concerns about China's economic slowdown.
"The 11.9-percent increase in China's first-quarter GDP was largely due to lower comparison base last year when the nation was hit hardest by the financial crisis," Ma said.
The slowdown in the second-quarter economic growth was also partly because of measures China took to cool the runaway property market and reduce emissions, Ma said.
However, the property cooling measures will not throw a major impact on the country's economic growth, he said, as the sector accounted for only a small share of the country's economy, and it is still growing even after the measures were implemented in April.
China's real estate investment accounts for 20 percent of the country's total investment, and the sector takes up a small share of the China's GDP, said Ma.
According to him, investment in the sector surged some 37 percent in August from a year earlier, and real estate sales grew 6 percent year on year in the first eight months of 2010.
Ma's views was echoed by Xia Bin, a member of the monetary policy committee of the People's Bank of China, the central bank.
It is an exaggeration to claim that the overheating property sector would cause a collapse of China's economy, said Xia.
"The slowdown in the second quarter was a result of our macroeconomic control," Xia said.
He said rules regulating local government financing vehicles to clear up their debt also caused a cut in the growth rate.
Xia, meanwhile, warned that China's high prosperity and growth achieved from 2003 to 2008 is not likely to sustain, and people might need to lower expectations of its potential growth rate.
"China faces massive pressure and lots of challenges in maintaining a double-digit growth," he said.
Ma Jiantang said he is not worried about the speed of China's economic growth. What worries him are how to accelerate the transformation of the nation's economic development pattern, how to enhance the rates of resources utilization efficiency and how to protect the environment.
He said the country should put more efforts to the economic restructuring and the transformation of the nation's economic growth model.
China has taken measures to boost consumer spending and social security, but the efforts won't yield immediate results in the short term, Xia said.
He also said China's monetary policy should return to "neutral and reasonable levels" as record bank lending last year triggered asset and housing bubbles.
China's new yuan-denominated lending for the first eight months stood at about 5.7 trillion yuan (838 billion U.S.dollars), compared with 8.15 trillion yuan in the same period last year, according to data from the central bank.
The country's inflation rate quickened to a 22-month high in August by rising 3.5 percent from a year earlier, largely driven by adverse weather conditions that brought up food costs.
It was also the second consecutive month the CPI has exceeded the government's full-year target of 3 percent.
However, analysts expect the country's CPI growth to ease in the fourth quarter as the pace of food price increases is likely to slow down from September and China can achieve its inflation target this year through proper management of expectations during the final quarter.
