Center
NBS: Macro economy is 'sound and stable'
(China Daily)
Updated: 2006-11-27 08:45
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However, Bert Hofman, a leading economist on the Chinese economy at the World Bank (WB), disagreed. He said China's exports would not be seriously impacted by a slowdown in the US economy.
In an earlier WB report, Hofman said the growing trade surplus would aggravate the country's over-reliance on foreign trade and investment and suggested China rebalance its economy by boosting domestic consumption.
Chief economist Cao Yuanzheng of the Bank of China International agreed with projections of a slight fall in China's trade surplus. Apart from the impact of the slowdown of foreign economies, rising global energy prices and the phase-out of tax privileges for foreign-invested companies and certain export-oriented businesses will be factors.
"If China's economy starts to slow down next year, an overcapacity problem will appear the year after next," he said.
Cao said the best policy for the Chinese Government was to maintain the current level of macro-economic control. "Don't jam your foot on the gas or the brake, just maintain the current speed," he said.
But Wang Tongsan, director of the Quantitative Economy Institute of the Chinese Academy of Social Sciences, claimed current macro-economic control was "far from satisfactory."
"Investment and money supply are still growing rapidly while property prices remain high," he said.
Given that the previous slowdown in the early 1990s and in 1998 both stemmed from tougher macro-economic controls rather than external factors, Wang stressed the necessity of keeping alert to signs of decline.
"The key is to apply the right macro-economic adjustment policies at the right time," he said.
After China tightened control of the money supply and adopted a battery of industrial policies to cool the economy, growth dropped from a blistering 11.3 per cent in the second quarter to 10.7 per cent in the first nine months.
In an earlier WB report, Hofman said the growing trade surplus would aggravate the country's over-reliance on foreign trade and investment and suggested China rebalance its economy by boosting domestic consumption.
Chief economist Cao Yuanzheng of the Bank of China International agreed with projections of a slight fall in China's trade surplus. Apart from the impact of the slowdown of foreign economies, rising global energy prices and the phase-out of tax privileges for foreign-invested companies and certain export-oriented businesses will be factors.
"If China's economy starts to slow down next year, an overcapacity problem will appear the year after next," he said.
Cao said the best policy for the Chinese Government was to maintain the current level of macro-economic control. "Don't jam your foot on the gas or the brake, just maintain the current speed," he said.
But Wang Tongsan, director of the Quantitative Economy Institute of the Chinese Academy of Social Sciences, claimed current macro-economic control was "far from satisfactory."
"Investment and money supply are still growing rapidly while property prices remain high," he said.
Given that the previous slowdown in the early 1990s and in 1998 both stemmed from tougher macro-economic controls rather than external factors, Wang stressed the necessity of keeping alert to signs of decline.
"The key is to apply the right macro-economic adjustment policies at the right time," he said.
After China tightened control of the money supply and adopted a battery of industrial policies to cool the economy, growth dropped from a blistering 11.3 per cent in the second quarter to 10.7 per cent in the first nine months.
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