Declining exports to slow China’s GDP growth

March 24th, 2008 - 4:42 pm ICT by admin  

Xinhua
Beijing, March 24 (Xinhua) Declining exports in the wake of the US credit crunch is likely to pull China’s gross domestic product (GDP) growth down to 10.5 percent this year, a study said Monday. China’s booming exports are likely to see a sharp decline, which will tame the 11.4 percent GDP growth last year to 10.5 percent in 2008, in the backdrop of the subprime mortgage crisis and slower global economy, according to a research paper released by the Economic Research Institute of Renmin University.

The projected figure, however, is still above the official target of 8 percent despite of government’s cooling measures, the report said.

The economic overheating risks showed signs of relief after GDP peaked at 11.4 percent last year, Deputy Dean of the Economic School of Renmin University Liu Fengliang said.

The opinion was echoed by Guo Qingwang, Dean of School of Finance in the university, saying the GDP will grow below 11.5 percent in the coming two years.

It said inflationary pressures would remain a tricky problem for the government after the consumer price index (CPI) hit a near 12-year high of 8.7 percent in February, and with the continuous price rise in metal, crude oil, and agriculture products.

A one percent rise in the international oil price will lift China’s CPI by 0.1 percent, the report said.
Xinhua

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