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Economy expected to grow stably in 2005
By Wang Ying (China Daily)
Updated: 2004-12-03 23:00

China's economy is expected to maintain stable and rapid growth in 2005, said Zheng Jingping, spokesman of National Bureau of Statistics of China.

Zheng made the prediction when addressing the 2004 Annual Economic Conference of China IT Industry that opened Friday in Beijing.

China's economic development has ushered in a rapid growth period, which is expected to continue in 2005, according to Zheng.

Contributors for the vibrant momentum are the urbanization trend that comes with fast economic growth, the increasingly thriving chemical industry, and the burgeoning IT industry that serves as an impetus to upgrading traditional industries and trades, Zheng explained.

China is actively involved in international co-operation, and its concentrated efforts on industry internationalization have also contributed to economic success, Zheng said.

According to statistics, China's foreign trade volume climbed 34.35 per cent from January to October 2004 over the same period last year, with a US$11 billion trade surplus.

During the 10 months, the country's contractual foreign investment accounted for US$119 billion, up 34 to 35 per cent year-on-year, and actual foreign investment totalled US$53.8 billion, up 24 per cent, exceeding total actual foreign investment in 2003.

The world's economic development environment in the mild growth period is also conducive to China's robust economic growth in 2005, and the global economy will continue on its recovery track, Zheng said.

The International Monetary Fund (IMF) estimates the world's economy in 2005 will maintain a 4.3 per cent growth rate, slightly lower than the expected 5 per cent this year, but still topping the average increase of 3.5 per cent for 2000 to 2003.

Zheng said the central government will continue sticking to the rational macro-economic control measures, focusing on a scientific development perspective that fits China's particular circumstances and has strategic and far-reaching significance to create a preferential policy environment for economic development.

The Chinese Government's macro-economic controls have shown obvious effects for the country's 2004 economic growth, according to Zheng.

Statistics show the country's financial revenues jumped by 24 per cent for the first 10 months this year, and enterprises' profits increased by 40 per cent.

More fixed assets investment, backed by revenue increases in 2004, will further push China's economic growth in 2005, together with demands from foreign trade and domestic consumption, said Zheng.

The Consumer Price Index (CPI) increased by an average 4.1 per cent during the first 10 months of 2004, and is expected to continue growing next year, due to soaring real estate prices in China. The Influences of surging oil prices in the international market and other possible new price hike factors will also have an impact, said Jiao Jinpu, deputy head of the Research Bureau under the People's Bank of China, who is also attending the annual economic conference sponsored by the Ministry of Information Industry.

Problems that may curb China's 2005 economic growth still exist, Zheng noted, including China's current economic structure and economic growth mode that do not fully accord with market economy rules.

As for short-term obstacles, the agricultural industry's further development still faces difficulties, reductions on the scale of fixed-asset investment to avoid inflation still could see possible rebounds, and how the government successfully copes with the situation after China's World Trade Organization grace period remains uncertain, said Zheng.



 
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