Economy

China's economy to grow slower: Economist

(Xinhua)
Updated: 2010-10-21 17:44

BERLIN - China's economic growth rate will slow down to less than 10 percent in the next five years, but will remain the engine for world economic growth, a senior German economist said Wednesday.

"In the next five years, China's economic growth rate is not likely to reach 10 percent or exceed that figure," Norbert Walter, former chief economist of the Deutsche Bank Group, told Xinhua in an interview.

For China, "an average annual growth rate of about eight percent is more realistic," he said.

China's economic expansion in the past 25 years has been accompanied by over-consumption of the country's natural resources, which resulted in a fast drop of underground water levels, deteriorating air quality and impoverishment of farmland due to the use of chemical fertilizers and pesticides, the economist said.

In the face of these serious challenges, China's consumption is unlikely to expand remarkably, which will result in a slowdown of the country's economic growth, he said.

However, Walter stressed that, with its economic growth rate of about eight percent, China will remain the "locomotive" for world economic growth.

China, having solid capital strength and a large demand for raw materials, will step up its investment in foreign countries, he said.

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Walter said China's strategic significance for the economic development of Asian and African regions will win high appraisal.

However, the economist believes China-US relations will experience difficulties in the future as the United States, on the one hand, will pressure China on yuan revaluation, and on the other hand, has an urgent need for "Chinese savings" to cover its financial deficits.

On the cooperation potential between China and Germany in the next five years, Walter said that the two countries respect each other and enjoy a good relationship.

German products are popular in China, where they have the reputation of being reliable and of good quality, Walter said.

China is willing to establish a cooperative partnership with Germany that leads the world in such areas as environmental protection, renewable resources and waste disposal, he said.

Germany, with a rapidly aging population, has successfully tackled health care and pension issues, a feat that China could draw lessons from, he said.

The two sides could also further strengthen their cooperation in the field of finance, the economist added.