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SCMP Reporter

China seems to be headed towards a picture-perfect performance again this year, at least in macro-economic terms, while much of the world falls into economic decline.

A top economics official in Beijing has predicted the mainland will see growth of 7 per cent to 8 per cent this year, an estimate backed by foreign analysts.

'The year 2002 is very likely to be seen as a turning point for China's macro-economy to leave the period of slowing growth behind,' Qiu Xiaohua, deputy head of the State Statistical Bureau, told the China Securities Journal.

Pushed up by infrastructure spending and rising exports, China's economy grew 8 per cent last year, up significantly from 7.3 per cent in 2001.

Foreign economists believe Mr Qiu is right in expecting a repeat performance this year. Huang Yiping, China economist at Salomon Smith Barney in Hong Kong, said yesterday the senior official's estimate was reasonable.

'These few years, officials have actually been conservative in their estimates,' Mr Huang said. 'They've been this way since the [1997] Asian crisis.'

Mr Huang estimates the economy will grow 7.6 per cent this year.

The government also announced that industrial output rose 14.8 per cent last month, pushed up by robust sales of cars, computers and mobile phones.

Mr Qiu added that the government would accelerate growth by speeding up reform of state-owned enterprise and the financial and rural sectors.

Export growth will likely slow this year from last year's 22 per cent, but officials expect the slowdown will be offset by growing domestic and foreign investments and rising local consumption.

The government also announced it will train and place more than six million recently laid-off women workers by 2005, with many becoming nannies and housekeepers. The All-China Women's Federation, a group that advises the government on women's issues, said it would encourage more urban women to take up jobs that were once left to peasant migrant workers.

Mr Huang, of Salomon Smith Barney, said the mainland was adjusting well despite the pressures caused by its entry into the World Trade Organisation.

'Most countries experienced deterioration of their current accounts and depreciation of their currencies in the initial years of their WTO membership,' Mr Huang wrote in a recent report.

'In China, imports grew very rapidly in 2002, up 21 per cent. Export growth was even higher, up 22 per cent. The trade surplus rose to US$30 billion [HK$233.4 billion], compared to US$23 billion in 2001.'

Many international experts predicted that China would collapse upon entering the WTO, but Mr Huang noted that the scenario turned out to be just the opposite.

'In fact, some countries are even pressuring the yuan to be revalued upwards,' he said.

'To many pessimists in the region, it was also a surprise that China didn't take everybody's jobs but provided more jobs for many of its neighbours through its growing imports.

'In 2002, East Asian economies' exports grew by a modest 5.3 per cent. East Asian exports to the US were virtually stagnant, growing by only 1.3 per cent, and exports to Japan shrunk by 4.8 per cent.

'Yet, exports to China [including exports to Hong Kong] jumped by 32.7 per cent. China has already surpassed Japan to become East Asia's second largest export market.'

PEAK PERFORMANCE

An economics official predicts growth of up to 8 per cent

Growth in exports is expected to slow from last year's 22 per cent

But officials say the fall will be offset by growing domestic and foreign investments and rising local consumption



Dream year ahead for economy, top official predicts