Macro-economic measures taken by the Chinese government are taking effect, averting the risks of overheating and starting to cool the economy, a report released by the economic forecasting department of the State Information Centre (SIC) said, forecasting that Chinas economy will slow a little in the second half.
Chinas gdp witnessed a 10.9% growth in the first two quarters, the fastest in a decade. Driven by strong overseas demand, Chinas exports in the second half year will continue to boom, the SIC report said. It predicts that Chinas GDP growth for the first three quarters will be 11% , 1.1% up on the same period last year, and that growth for the whole year will be 10.8%, up 0.9% year on year. Chinas trade surplus will also continue to bulge but at a slower rate.
The report estimates that in the first three quarters Chinas exports will grow by 24.4% year on year with imports up 20.8%, and the trade surplus will hit $102.2 billion as against $61.44 billion for the first six months.
Driven by Chinas strong economic growth and supportive government policies, citizens income will continue to rise rapidly and domestic demand will remain strong, the report said. It estimates that consumer goods retail sales will grow by 13.5% in 2006, 0.4% higher than 2005. China has strengthened control on fixed assets investment by taking a series of measures in land, credit and industry.
The report predicts that while investment growth will slow slightly in the second half year, investment incentive is still strong, and the final figure for fixed assets investment growth will be higher in 2006 than in 2005.