China Estimates Growth
in 2006 Was Likely 10.5%
BEIJING -- China's economy is likely to have expanded 10.5% in 2006, the chief economist of the National Bureau of Statistics said yesterday.
The estimate is in line with the government's recent forecast. China's gross domestic product grew 10.2% in 2005.
Yao Jingyuan, the senior official of the statistics bureau, said at a financial forum that the combined value of China's imports and exports likely rose 25% in 2006 to $1.7 trillion.
Mr. Yao's forecast suggests economic growth slowed slightly but remained rapid in the fourth quarter. The economy surged 10.7% in the first three quarters from the same period a year ago.
In 2006, China's government took a series of measures to prevent the economy from overheating, such as interest-rate rises and increases in banks' deposit-reserve-requirement ratio to curb excessive liquidity and rapid growth in fixed-asset investment.
Mr. Yao said the economy will likely maintain a "fast and steady growth" in 2007, with the growth rate likely to slow to around 10%.
He cautioned that the economy is still facing risks of overheating. However, the government should also guard against any big slowdown in growth, he said.
There are still a few prominent problems in the economy, such as "overly high credit growth, excessively rapid investment growth, and a large trade surplus," he said.
Mr. Yao said he expects China's trade surplus, which hit a few monthly record highs in 2006, to total $170 billion, up from $102 billion in 2005.
"While credit growth has stabilized a bit in the third quarter, it remains at a high level," said Mr. Yao, who predicted that new yuan loans will total three trillion yuan ($384 billion) for 2006. That would exceed the 2.5 trillion yuan annual target for new yuan loans set by the central bank at the beginning of the year.
Industrial output is likely to have grown 17%, faster than an 11.4% rise in the previous year, Mr. Yao said.
Retail sales are likely to have risen 13% to seven trillion yuan in 2006, he said. That would be basically unchanged from 12.9% growth in 2005.
He also estimated China's urban fixed-asset investment likely grew by 26% to 27%, compared with the previous year's urban FAI growth of 27.2%.
From: Wall Street Journal, By JAMES T. AREDDY
Date: December 29, 2006 Back