Center

NBS: Macro economy is 'sound and stable'

(China Daily)
Updated: 2006-11-27 08:45
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"The macro economic regulation policies will continue and remain stable in the fourth quarter and the near future to build a solid foundation for economic development next year," said Zhu Hongren, a senior official with the National Development and Reform Commission.

However, the growth of fixed assets investment and bank loans is likely to rebound, the imbalance of international payments is widening, and the environment is still under threat.

Divided views

Amid signs of a possible slowdown in world economic growth next year, Chinese and overseas experts are divided about whether China should beef up macro-economic controls.

Some experts advise the government to adopt a cautious approach to macro-economic control policies because the year 2007 may see a slowdown in the world economy after fast growth rates for three years.

"Next year may be a turning point, in which case the biggest challenge for the Chinese authorities will be the possible overlap of slowdown trends in China and in the world," said Qu Hongbin, chief economist of the Hong Kong and Shanghai Banking Corporation (Asia).

As the impact of this year's macro-economic control policies will not be fully felt until next year, further curbing investment and exports may amplify the consequences of a slowdown in the world economy, he explained.

"If economic growth in the United States drops 3.5 per cent to 2 per cent next year, China's export growth will fall from 30 per cent to 15 per cent, which will mean a decline of three percentage points in the growth of gross domestic product," Qu told a recent forum on China's economic prospects in Beijing. He said an export slowdown would translate into less income, less expenditure and fewer jobs.

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