Despite a "fragile" world economy China is targeting 8% GDP growth in 2010, says industry minister
By Bloomberg News
(Bloomberg) — China, the world's third-biggest economy, is targeting 8 percent growth in 2010 amid a "fragile" global recovery, industry minister Li Yizhong said.
The nation also aims for an 11 percent gain in industrial production, Li said in a ministry Webcast today.
China has officially aimed for 8 percent growth in gross domestic product each year from 2005 and is yet to come up short. Central bank adviser Fan Gang cautioned Nov. 18 that "double-digit" growth wouldn't be good in 2010 amid the rising risk of bubbles in stock, real estate and commodity prices.
"They'll probably overshoot 8 percent next year," said Alaistair Chan, an economist at Moody's Economy.com in Sydney. "The economic momentum China's generated means it'll be easier to achieve 8 percent in 2010 than it was this year."
Chan forecasts a 9.3 percent expansion next year compared with 7.7 percent in the first nine months of this year.
The target isn't always a good guide to actual performance. In 2007, the 13 percent expansion was 5 percentage points higher than the goal.
"Based on the central government's target for around 8 percent economic growth, we're aiming for around 11 percent growth in industrial output," Li, the minister of industry and information technology, said.
General Motors, Volkswagen
China's economic rebound this year, driven by stimulus spending, record bank lending and subsidies for consumer purchases, has aided companies from General Motors Co. to Volkswagen AG as car sales soar.
Industrial production will expand by more than 11 percent this year, ensuring an 8 percent economic expansion, the minister said. That compares with output growth of 10.3 percent in the first 11 months of this year.
Li cautioned against "blind optimism" over the rebound in output growth because it has been driven by government stimulus and investment. China's industry is "overly reliant" on export markets, the official said, adding that the global economic recovery remains "fragile."
China's banks will probably extend 9.8 trillion yuan ($1.4 trillion) of new loans this year, Li said, without citing a source for the forecast. The total for the first 11 months was 9.21 trillion yuan, central bank data show.
Unprecedented lending has added to the risk of asset bubbles and resurgent inflation. China's cabinet pledged last week to tackle "excessive" gains in property prices in some cities and economic planners reassured the country that inflation would stay in check.