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SCMP Reporter

Two think-tanks under the same mainland ministry have made different forecasts for China's economic growth this year.

The State Information Centre's economic forecasting department is predicting gross domestic product will grow 7.1 per cent this year.

The centre is a think-tank under the State Development Planning Commission.

If China's economy grows at that pace this year, it will be the second consecutive year economic growth has been unable to keep pace with the year before.

Last week, director of the National Bureau of Statistics, Zhu Zhixin, said GDP should have reached 7.3 per cent last year, according to preliminary figures, compared with 8 per cent in 2000.

At the same time, another research institute under the commission offered a more optimistic prediction.

Chen Dongqi, chairman of the commission's Economic Research Institute, said GDP was likely to reach 7.5 per cent this year, according to yesterday's China Daily.

'I don't want to play down China's economic growth potential in the years to come,' said Mr Chen, who has offered the most upbeat forecast by any government official yet.

Mr Chen's optimism was based on greater private and foreign investment in China and confidence that the Government would bolster domestic consumer sentiment.

The State Information Centre conceded the Government's fiscal policy to invest in key infrastructure projects would require Beijing to buy equipment and services from international markets.

However, it also pointed out that the weak global economy would keep demand for Chinese exports in international markets low.

The centre forecasts that China's export growth will fall under 5 per cent in the first half of this year.

It predicts the economy will grow only 6.8 per cent in the first half this year due to the still infirm global economy and a relatively high base of comparison in the first half of last year.

The economy should grow 7.3 per cent in the second half as the global economy recovered and China's policies to expand domestic demand began contributing to GDP growth.

But in order for China's GDP to grow 7.1 per cent for the full year, the think-tank is recommending the Government increase the scale of bond issuance this year to fund infrastructure projects.

Last year, Beijing issued 150 billion yuan (about HK$140.56 billion) in special bonds to fund infrastructure projects.



Economic outlook splits key research entities