CASS: Chins's 2010 GDP growth to top 9%

China's economy should reach its target growth rate of 8 percent this year, and go on to do even better next year with a top think tank predicting a 9 percent expansion. The China Academy of Social Sciences has just released its annual Blue Book of the economy.

The China Academy of Social Sciences has just released its annual Blue Book of the economy.

China should be able to achieve its target of 8-percent growth this year. And next year will see the figure stand between 9.1 to 9.5 percent.

While the Consumer Price Index, a main gauge of inflation, is expected to achieve a growth between 2 to 3 percent, a reasonable level.

Zhang Tao, Assoc. Research Fellow of Chinese Academy of Social Sciences said "Obvious inflation is unlikely to happen in 2010, because the shortage of demand has not been solved fundamentally. And the problem of over-capacity will put more pressure on price declines."

The report also says foreign trade will return to close to its 2008 levels. Growth in both imports and exports will enter positive territory. The report ascribes this positivity to global economic rebound and low bases set in 2009.

In contrast, the upward trend in investment will slow slightly in 2010. But with the market expected to play a bigger role, next year's investment growth will be more sustainable. While another important economic index, consumption, will maintain steady growth.

The Blue Book is suggesting that the government maintain its current macro policies. It is also calling for more emphasis on structural adjustments, deepening reform, as well as improvements in people's livelihoods.

Zhang Liqun, Senior Research Fellow of Dev't Research Center of the State Council said "It's the right decision for the government to maintain current policies, as they will provide a sound environment for companies' development and residents' consumption. But more efforts are needed to solve problems such as over-capacity and an over-heating property market."

The Blue Book also warns of uncertainties still existing both at home and abroad, adding that there may be some fluctuations in macro-economic development. They are also suggesting a bigger role for the market in further expanding domestic demand.

Over the past year, China's stimulus measures have greatly boosted the country's economic recovery. To ensure this continues, the country has vowed to maintain stability in its macro-economic policies in 2010. But the challenge is how to make the growth more sustainable and balanced. Many believe the key lies in structural adjustments in various areas.

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