Consumption plan gets slow start: World Bank
10 February 2006
China will again enjoy strong exports in 2006, the World Bank said, but it will take time before domestic consumers begin to drive the economy as Beijing hopes. In its China Quarterly Update, the bank said local governments' concentration on high GDP numbers threatened to derail Beijing's plan to shift its focus to stimulating domestic spending. However, Bert Hofman, the bank's chief economist, added that the recent 2% yuan revaluation and its linkage to a basket of currencies had achieved "a fair amount of success" in boosting domestic consumption. The bank also projected a 9.2% GDP jump in 2006 based on recently revised data, but said the new projection was equivalent to its previous 8.7% growth forecast based on old data.