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Economic growth to slow slightly

(Xinhua)
Updated: 2006-07-30 08:56

A report released by the State Information Center (SIC) predicts that China's economy will slow a little in the second semester.

China's GDP grew by 10.9 percent in the first two quarters.

According to the report by the Economic Forecasting Department of the SIC, measures taken by the central government are taking effect, averting the risks of overheating and starting to cool the economy.

Driven by strong overseas demand, China's exports in the second half year will continue to boom, said the report.

China's trade surplus will also continue to bulge but at a slower rate.

The report estimates that in the first three quarters China's exports will grow by 24.4 percent year on year with imports up 20.8 percent, and the trade surplus will hit 102.2 billion U.S. dollars as against 61.44 billion U.S. dollars for the first six months.

Driven by China's strong economic growth and supportive government policies, citizens' income will continue to rise rapidly and domestic demand will remain strong, said the report.

The report estimates that consumer goods retail sales will grow by 13.5 percent in 2006, 0.4 percent higher than 2005.

China has strengthened control on fixed assets investment by taking a series of measures in land, credit and industry.

The report predicts that while investment growth will slow slightly in the second half year, investment incentive is still strong, and the final figure for fixed assets investment growth will be higher in 2006 than in 2005.

A rise in consumer prices will be contained because bottleneck factors such as electricity supply are being overcome, said the report.

Residential property prices are likely to rise further for several reasons. Money supply is still loose, Chinese citizens are keen to purchase residential property and foreign investors are hungry to invest in property in the expectation that the renminbi will rise in value, said the report.

In conclusion, the report said that while China's economy will continue to grow rapidly in the second half year, the government's tighter macro-control policies will rein in the growth to some extent.

The report predicts that China's GDP growth for the first three quarters will be 11 percent, 1.1 percent up on the same period last year, and that growth for the whole year will be 10.8 percent, up 0.9 percent year on year.