“‘Overcapacity’ is the word increasingly being used in reference to Chinese industry,” according to Jim Walker, chief economist at CLSA. “Export orders are holding up reasonably well but it will be an uphill struggle for exports to offset weakness in domestic industry as global demand conditions falter in 2006.” In related news, leading aluminium smelters and steelmakers are reported to have agreed to cut production by 10 percent.
Top government priorities for the economy include maintaining balanced, stable growth, boosting the rural economy, and improving energy conservation and environmental protection. In addition focus is being given to managing the politically sensitive trade surplus – estimated to be US$100 billion for 2005.
Against this background, the World Bank has raised its forecast for economic growth for this year to 9.3 percent, and 8.7 percent for 2006. The drivers are noted as strong domestic demand as well as exports.
See related news:
China Pledges Stable Growth for 2006
Forbes – USA
China plans to control investment and promote growth in domestic demand in 2006, state media reported Friday, following an annual economic meeting of top …
World Bank raises China’s growth forecast to 9.3%
China Daily – China
The World Bank has raised its forecast for China’s economy to grow by 9.3 percent in 2005, and 8.7 percent for 2006, based on strong domestic demand and …