According to the latest China Quarterly Update (a regular assessment of China’s economy), prepared by Louis Kuijs, Senior Economist and main author of the CQU, China’s growth has moderated somewhat to a still healthy pace, with a shifting composition, the World Bank’s press release said.
The CQU said that GDP growth had declined from 10.6 percent in the first half to a strong 9.6% year-over-year in the third quarter. The domestic economy cooled as the stimulus impact is fading out and the monetary stance is being normalized. Growth of investment and urban consumption has decelerated, and so has that of imports. Meanwhile, with exports strong, net external trade has contributed significantly to (yoy) growth and the external surplus is rising again.
The Update notes that, despite an expected deceleration, global growth prospects are fairly favorable due to emerging market strength. However, risks remain, including a weaker outlook in high income countries. Global price pressures remain contained by spare capacity in many countries, but raw material prices have risen again and there are upward inflation risks internationally.
China’s own economic prospects remain sound, with risks both ways, according to the Update. Louis Kuijs forecasted the GDP growth in 2010 might be at 10%, and at 8.7 percent in 2011.
Pushed up by higher food prices, inflation may stay above the 3 percent target for a while. It is unlikely to escalate as core inflation remains in check. However, commodity prices may rise further while sustained high wage growth is unlikely but cannot be ruled out. Given the fundamental drivers of property prices, they are unlikely to be contained for long. On current trends and policies, the external surplus is on course to rise in 2011 and the medium term, in US dollar terms.
The CQU said that GDP growth had declined from 10.6 percent in the first half to a strong 9.6% year-over-year in the third quarter. The domestic economy cooled as the stimulus impact is fading out and the monetary stance is being normalized. Growth of investment and urban consumption has decelerated, and so has that of imports. Meanwhile, with exports strong, net external trade has contributed significantly to (yoy) growth and the external surplus is rising again.
The Update notes that, despite an expected deceleration, global growth prospects are fairly favorable due to emerging market strength. However, risks remain, including a weaker outlook in high income countries. Global price pressures remain contained by spare capacity in many countries, but raw material prices have risen again and there are upward inflation risks internationally.
China’s own economic prospects remain sound, with risks both ways, according to the Update. Louis Kuijs forecasted the GDP growth in 2010 might be at 10%, and at 8.7 percent in 2011.
Pushed up by higher food prices, inflation may stay above the 3 percent target for a while. It is unlikely to escalate as core inflation remains in check. However, commodity prices may rise further while sustained high wage growth is unlikely but cannot be ruled out. Given the fundamental drivers of property prices, they are unlikely to be contained for long. On current trends and policies, the external surplus is on course to rise in 2011 and the medium term, in US dollar terms.