The growth in China's external trade will slow significantly next year, bringing down the country's trade surplus by as much as US$10 billion, according to a report published by the Shanghai Securities Journal and the State Information Centre yesterday.
The report, entitled the '10 main forecasts for China's economy in 2005', attributes the slowdown in trade growth to the shift from an emphasis on the quantity rather than quality of goods.
It forecasts that the growth in trade will hit about 21 per cent next year, about 14 percentage points lower than the amount forecast for this year. This would bring the trade surplus to US$15 billion.
Apart from trade, the report says the country's economic growth will return to normal next year.
'The excessive growth in China's investment demand will be changed. As [the government sets to] suppress inefficient investment and strengthen investments in the weak sectors, the Chinese economy will return to normal operations,' it says.
It forecasts the adoption of a 'neutral' monetary policy.
'The pressure for an appreciation of the value of the yuan will continue to exist. The currency exchange system will continue to improve, and there is a possibility of further interest rate increases,' the report says.
