The Asian Development Bank (ADB) has reduced its
prediction of China's economic growth this year by 0.2
percentage point, taking into account the impact of
SARS.
An ADB report on the
development of Asia in 2003, released on April 28, predicted
that the growth of China's GDP for this year would be 7.3
percent, lower than last year's 8 percent. It also estimated
that the growth of China's GDP for 2004 would stand at 7.6
percent.
According to the report,
China's economy maintained the trend of rapid expansion in
2002, with the growth rate reaching an all-time high in the
previous five years. China's foreign trade has increased
noticeably, foreign direct investment chalked up a historic
record and domestic demand soared. The influx of foreign
direct investment is expected to offset the declining trade
surplus under the current account caused by deteriorated
imbalance in foreign trade. In 2003, China's trade surplus
under the current account accounted for about 1.6 percent of
the GDP, against 1.9 percent in 2002. China's trade partners
worldwide, particularly those in Asia, must seize the
opportunity of its rapidly expanding domestic market. In
2003, the growth of China's imports will exceed that of
exports, which will cut the country's trade surplus. China's
imports are expected to grow by 12 percent and 14 percent in
2003 and 2004 respectively.
The report noted that the state treasury would
face increasing pressure, as state-owned banks require more
capital input and the building of a social security system
needs more funds. In spite of the impact of SARS, China's
domestic consumption will maintain steady growth.
According to the report, China now
faces the following challenges: creating sufficient jobs to
absorb newly added labor force, part of the workers laid off
by state-owned enterprises and part of the rural surplus
laborers: improving the legal framework and the executive
system to provide private sectors, the main job suppliers,
with a better development environment: respecting contracts,
eliminating counterfeit and shoddy products, protecting
intellectual property rights, removing obstacles to fair
competition, combating corruption and establishing standard
accounting and auditing rules; narrowing the gap between
eastern coastal areas and inland poor regions and that
between the incomes of urban and rural areas, and reducing
poor population; and eliminating the weaknesses of the
financial system. The poor operation of the banking sector
and the huge amounts of non-performing loans have lowered
the efficiency of the financial system and created
difficulties for private businesses and farmers in financing.
|