Chinese economic growth set to slow down

2010-11-06 13:55

Beijing – China’s economy is likely to see annual growth of about 7% in the coming three to five years, a marked slowdown from an estimated growth of 10% this year, a senior government researcher said today.

Liu Shijin, a deputy director of the Development and Research Centre under the State Council, or cabinet, said a slower-than-expected global economic recovery, as well as the focus on economic rebalancing of the domestic economy, would moderate the country’s growth.

China’s annual gross domestic product growth slowed to 9.6% in the third quarter from 10.3% in the second quarter in what the government described as an expected moderation resulting from targeted structural adjustment.

“China has witnessed 30 years of long, high-speed growth. In the coming three to five years, the economy will enter a phase of mid-level speed growth,” Liu told a forum organised by Caixin magazine.

He said that China’s eastern coastal provinces would be the first to enter a period of slower growth.

Liu warned that China may face mounting risks from imported inflation in the coming years, as the new round of quantitative easing by the US would create excessive liquidity and push up global commodity prices.

Global speculative capital stemming from monetary easing policies by rich economies might also inflate asset bubbles in emerging markets, as investors bet on the prosperous economic outlook in these regions, Liu said.

“It is an inevitable trend for the US dollar to keep weakening, which may bring about substantial adjustments in the global monetary system,” he added.

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