China 'will avoid slowdown repeat'
China’s economy is safe from a “double-dip” slowdown in growth, a top economic planner said today, though he acknowledged challenges in keeping inflation under control and cutting back on excessive and wasteful investments.
“First of all, you can say for sure that the Chinese economy will not double dip,” Li Pumin, a spokesman for the National Development and Reform Commission, said in an online conference posted on the main government website.
Mr Li pointed to the gradual world economic recovery and China’s own strong potential as factors supporting stable expansion after the 10.3% growth last year that displaced Japan as the world’s second largest economy.
China’s economy slowed only briefly during the global financial crisis, as massive government stimulus spending helped counter the impact of plunging exports.
But that same spending, along with surging food prices, is now seen as a factor behind inflation that hit a 28-month high in November and remains above the government’s target of 4%.
After growth, price stability is Beijing’s top priority, Mr Li said.
Apart from ensuring adequate and efficiently distributed food supplies, the government needs to “resolutely control high and excess capacity and redundant, wasteful construction and to improve the quality and efficiency of investments”, he said.
In the longer-term, China is seeking to offset its reliance on exports as a driver of economic growth by increasing domestic consumer demand. The government’s 2011 economic blueprint calls for nurturing self-sustaining growth by promoting consumer spending.
That could help ease tensions with Washington and other trading partners that complain about currency controls and import barriers that they say swell China’s multibillion-dollar trade surplus.
But that goal will remain elusive, some economists say, as long as many Chinese industries, whose overcapacity has been supported by cheap credit and other government policies, continue to produce far more products than the country can consume.
