100 economists appraise China economy
Updated: 2007-07-25 11:05
After the Chinese macro-economic statistics unveiled last week, a survey published by Caijing Magazine (or Finance Magazine) this Monday covered 100 representative economists' judgments and predictions regarding the Chinese economy and its development.
The survey was jointly conducted by the Caijing Magazine and China Economic Monitoring and Analysis Center under the National Bureau of Statistics.
The survey suggested that the comprehensive economist confidence index was at 5.73, its highest since the first quarter of 2005, and that the index had remained stable and relatively high for a year.
Because the consumer price index (CPI), a major gauge of inflation, went up to 4.4 percent in June alone and totaled 3.2 percent in the first half. Nearly 90 percent of the economists believed the CPI would grow more than 3.0 percent in 2007, the original target set forth by the government. However, most of the economists reserved their opinions ahead of expected measures on controlling the booming CPI.
Some 84 percent of the scholars, 21 percent more than in the first quarter, proposed further hikes in interest rates, and 82 percent advocated raising the required reserve ratio for banks.
At the same time, over 50 percent of the economists predicted that the international crude oil price will remain high and the renminbi exchange rate will continue to grow at a rate below three percent.
Following the announcement of economic statistics for the first half year, the central bank slightly raised interest rates and the State Council reduced the interest tax to 5 percent from 20 percent. Contrary to anticipations of a slipping stock market, the benchmark Shanghai Composite Index saw an increase of 145 points with a 3.73 percent gain last Friday, suggesting the market had digested the policy effect and there is no risk of a malignant overheated economy. That belief is held by Gong Fangxiong, director of the China research department at JP Morgan and shared by China International Capital Co Ltd.
However, Song Guoqing, a professor from Peking University's China Economy Research Center, and Liang Hong, chief economist of Goldman Sachs (China), insisted that the overflowing liquidity could result in excessive inflation pressures.
Song said the industry added value witnessed a monthly 3.3 percent rise in June, with an annualized rate of 47.6 percent, which is absolutely unsustainable. Thus in the absence of appropriate measures, the annual inflation rate may end at about 4 percent this year, Song said.
|
|