China's trade surplus jumps 15% in August

(Xinhua)
Updated: 2008-09-10 21:01

"But when considering the high investment price index, the real growth was lower than a year earlier."

Zhang Hanya, a researcher with the National Development and Reform Commission, the top economic planning agency, said investment impulse was low because of slower economic growth, yuan appreciation, rising production costs and tight credit controls.

China's gross domestic product (GDP) had been decelerating for four straight quarters through June. Exports, fixed asset investment and consumption are the three drivers of the economy.

"Everybody was worrying about the dismal economic outlook. The monetary tightening since last year was a bit too much," said Zhang Hanya.

"It's normal for the economy to retreat from 11 percent to 10 and even 9 percent," said Wang Xiaoguang. "The economic expansion might slow to as low as 8 percent over the next few years. But the authorities would not allow any slower growth than that.

"The GDP would slow further during the rest of the year with slower exports growth and declining housing prices."

The government has raised tax rebates for textile and garments exports, lifted credit quota and scrapped administrative fees for small businesses amid the latest efforts to boost the economy.

"The relaxation in the macro-economic control is surely a trend, but it would be a gradual process," said Wang Xiaoguang. "The economy now doesn't need any drastic stimulus plans."

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