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China economy may grow 4 times faster than EU, Japan
(Bloomberg)
Updated: 2005-12-30 16:09
China's economy will probably expand at more than four times the pace of Europe and Japan next year as Premier Wen Jiabao boosts consumer spending and encourages investment to ease transport bottlenecks.
The economy, on course to overtake France and the U.K. to become the world's fourth largest, will grow by 8.7 percent in 2006 after an estimated 9.4 percent this year, according to the median forecast of 23 economists in a Bloomberg survey. The European Union and Japan expect growth of 1.9 percent next year.
Wen said on Dec. 1 that China needs to maintain "rapid and stable" economic growth to raise the living standards of the nation's 1.3 billion people, whose per capita income ranks 129th in the world, lower than Egypt and Iran. The government is cutting taxes and raising salaries to encourage more spending on cars and household appliances.
"China and the U.S. will continue to be the main engines of global growth next year'," said David Cohen, director of Asian economic forecasting at Action Economics in Singapore. "The slowdown in growth is minor and China's demand for oil and metals will continue to pressure global commodity markets."
China's economy, which contributed 13 percent to global growth in 2004 according to IMF data, grew by an annual average 9.5 percent over the past three years.
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