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China think tank: 7.5 percent growth likely for 2014

Dec. 9, 2013 at 10:34 PM   |   Comments

BEIJING, Dec. 9 (UPI) -- China's economic growth in 2014 is likely to be 7.5 percent or about the same as this year, economists at the country's top think tank said.

However, the Chinese economy could do even a bit better -- a gross domestic product growth rate of 7.8 percent -- if all reform proposals are implemented and the global market shows a more robust recovery, said a report from the National Academy of Economic Strategy, part of the Chinese Academy of Social Sciences.

By comparison, the National Association for Business Economics predicted Monday the U.S. economy will advance at an annualized, inflation-adjusted pace of 2.8 percent in the coming year.

But the academy also warned Beijing should be alert to a number of uncertainties, especially on the domestic front, the official China Daily reported Tuesday.

Economists at the academy said the uncertainties include the country facing even greater downward pressure on domestic growth next year since new investment in public infrastructure is becoming less effective.

Other uncertainties cited include overcapacity in a number of major industries, feeble growth in consumer spending and local government debt financing approaching alarming levels.

The economists said China is most likely to see a 7.5 percent GDP growth and a 3.5 percent rise in inflation as measured by the consumer price index for 2014.

China, seeking to reduce its reliance on exports, wants to promote domestic consumption, but that process may still take time develop, the think tank report said. Additionally, its economists said they have long-term concerns for the economy's investment-dominated growth model.

Their concerns will be discussed at the upcoming annual Central Economic Work Conference, which will set targets for next year and further clarify reform measures, China Daily said.

The academy's report called for a balance between controlling government-led investment and stabilizing growth in the near term, and continually implementing prudent monetary policy.

Fan Jianping, chief economist at the State Information Center, told China Daily investment growth rate may slow next year due to high borrowing interest rate. Consumption growth is also likely to be slower in 2014.

© 2013 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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