• Tue
  • Jul 29, 2014
  • Updated: 6:29pm

Think-tank tips growth to slow in 2nd quarter

PUBLISHED : Wednesday, 09 May, 2007, 12:00am
UPDATED : Wednesday, 09 May, 2007, 12:00am
 

Projection puts CPI, GDP targets in range


The mainland's economic growth rate is expected to slow slightly to 10.8 per cent in second quarter of the year following the robust 11.1 per cent in the first quarter, according to a government think-tank.


The State Information Centre - a key research body under the National Development and Reform Commission, the mainland's top economic planning agency - also said the consumer price index was expected to gain 3 per cent in the second quarter. This figure was down from the 3.3 per cent year-on-year growth seen in March, but higher than the 2.7 per cent recorded in the first quarter.


The latest projections would put growth in gross domestic product for the first half of the year at 11 per cent, while inflation would be 2.9 per cent, the centre said in a report published yesterday by the China Securities Journal. The government has targeted GDP growth of 8 per cent and CPI growth of 3 per cent this year.


The trade surplus in the second quarter would be about US$52.4 billion, up from a record US$46.4 billion in the first quarter, the report said.


The mainland's first-quarter trade surplus was almost double the US$23.3 billion registered in same period last year, increasing friction with western trading partners, particularly the US.


The centre said it expected growth in exports would slow to 22.6 per cent in the second quarter from 27.8 per cent in the first, adding that after large swings in February and March as exporters ramped up shipments ahead of cuts in tax rebates, import growth would return to more normal levels.


The report forecast the trade surplus to reach US$98.8 billion in the first half of the year. The Chinese Academy of Sciences said last week it expected the trade surplus to surge 42.8 per cent this year to US$254.03 billion after hitting a record US$177.5 billion last year.


The faster-than-expected GDP growth in the first quarter has fuelled speculation that the government will launch a new round of tightening measures to cool growth. The centre suggested several measures to help prevent overheating, pointing to further changes in interest rates and bank reserve requirement ratios to curb excessive liquidity.


The central bank has raised interest rates three times in the past year and the reserve requirement ratio seven times in an attempt to mop up liquidity in the banking system, which also triggered an asset bubble.


Mainland stock markets have risen more than 40 per cent this year on back of a gain of more than 130 per cent last year. The benchmark Shanghai Composite Index gained another 2.8 per cent yesterday to close at a record high of 3,950.01, while the Shenzhen Composite Index soared 4.9 per cent to 11,401 on its first day of trading after the week-long Labour Day holiday.


The centre urged the government to accelerate the adjustment of imports and exports to rein in the trade surplus. It also urged the development of capital markets and a push for more domestic listings by innovative Chinese companies.


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