The Chinese economy is expected to grow by a strong 11.3 percent for this year and will only slow down slightly to 10.8 percent growth in 2008, according to a World Bank report on the economic outlook for emerging East Asia.
The growth would be achieved despite the US subprime-crisis-induced economic slowdown and rising global oil prices.
"We are still very optimistic about China," Bert Hofman, lead economist of World Bank in China, said yesterday at the release of the semi-annual report.
"Emerging East Asia", in World Bank terms, includes so-called developing economies in the region, such as the mainland, Indonesia, Malaysia and Vietnam, and the newly industrialized economies of Hong Kong, South Korea, Singapore and Taiwan Province. It does not include Japan or India.
Last year, the region achieved an eight-year-record growth of 8.1 percent. It is expected to top 8 percent this year for a second year running and moderate only slightly in 2008, according to the report.
The World Bank warned that if a US recession were to materialize, it would likely be accompanied by a "significant but not severe" decline in East Asian growth. This is because more buoyant investment and domestic demand in China and other countries have allowed growth to remain strong and even pick up this year, the report said.
"East Asia has achieved this year good results on growth mainly due to strengthening domestic demand," the report's lead author Milan Brahmbhatt said.
China's retail sales, for example, increased by a more-than-expected 18.1 percent in October. Its industrial growth was 17.9 percent year-on-year in October.
Global crude oil prices have soared to more than US$90 per barrel in recent days. The report calculated that an average oil price of US$90 per barrel in 2008 would be associated with an income loss in East Asia of a little more than 1 percent of its GDP. However, that would be similar to the additional annual costs of higher oil prices that the region has already experienced over the last three or four years.
(China Daily November 16, 2007)