ID :
195974
Wed, 07/20/2011 - 07:00
Auther :
Shortlink :
https://oananews.org//node/195974
The shortlink copeid
China's economic growth to slow for next 3 years
HONG KONG, July 20 (Yonhap) -- China's economic growth will continue to lose steam over the next three years as the country tightens its grip on the monetary policy, a state agency said Wednesday.
The National Development and Reform Commission estimated that China's gross domestic product will grow 9 percent this year and slow down to 8 percent in 2012 and 7 percent in 2013.
"Starting this year, China's economy will decelerate for three years in a row. The year 2013 is expected to be most challenging," said Wang Jian, macroeconomic researcher at the commission. "The country needs to adjust its focus on macroeconomic policies from curbing inflation to sustaining growth."
The slowdown was attributed to the country's aggressive tightening in the first half of this year to battle spiraling consumer inflation.
China's consumer prices rose 6.4 percent in June from a year earlier, hitting a 35-month high. They grew more than 5 percent for the fourth straight month, and the growth exceeded 6 percent for the first time since July 2008.
In a battle against soaring inflation, the central People's Bank of China has raised the benchmark interest rate three times this year while increasing the amount of money banks must keep in reserve six times in 2011.
The researcher said the country should shift its counter-inflation measures from monetary policies to fiscal policies.
A tight fiscal policy involves increasing the rate of taxation or cutting government spending, in order to reduce inflation pressure by reducing the growth of aggregate demand in the economy.
Ba Shusong, researcher at Development Research Center of China's cabinet State Council, offered a similar view.
"It will be too late to stop tightening the monetary policy only after the consumer price index drops. By then, the GDP growth rate would have already entered a long-term downward trend," Ba said.
The National Development and Reform Commission estimated that China's gross domestic product will grow 9 percent this year and slow down to 8 percent in 2012 and 7 percent in 2013.
"Starting this year, China's economy will decelerate for three years in a row. The year 2013 is expected to be most challenging," said Wang Jian, macroeconomic researcher at the commission. "The country needs to adjust its focus on macroeconomic policies from curbing inflation to sustaining growth."
The slowdown was attributed to the country's aggressive tightening in the first half of this year to battle spiraling consumer inflation.
China's consumer prices rose 6.4 percent in June from a year earlier, hitting a 35-month high. They grew more than 5 percent for the fourth straight month, and the growth exceeded 6 percent for the first time since July 2008.
In a battle against soaring inflation, the central People's Bank of China has raised the benchmark interest rate three times this year while increasing the amount of money banks must keep in reserve six times in 2011.
The researcher said the country should shift its counter-inflation measures from monetary policies to fiscal policies.
A tight fiscal policy involves increasing the rate of taxation or cutting government spending, in order to reduce inflation pressure by reducing the growth of aggregate demand in the economy.
Ba Shusong, researcher at Development Research Center of China's cabinet State Council, offered a similar view.
"It will be too late to stop tightening the monetary policy only after the consumer price index drops. By then, the GDP growth rate would have already entered a long-term downward trend," Ba said.
