China’s economy in 2008 will maintain a robust and stable momentum despite uncertainties ahead.

This comes from the country’s top legislative and political advisory sessions where the opinions voiced pretty much reflected this.

Liu Shucheng, a political adviser and director of the Economic Research Institute of the Chinese Academy of Social Sciences (CASS), believes it is almost impossible for China to score 10% of gross domestic product (GDP) growth this year.

He said, ‘China’s economy has maintained a long period of continued and stable growth, which is unprecedented since the founding of New China (in 1949).’

Justin Yifu Lin, a deputy to the National People’s Congress (NPC) and the World Bank’s chief economist, shown in our illustration, holds a similar view, saying China’s economy would be affected little by the U.S. subprime crisis.

Justin Yifu Lin said, ‘The demand by the United States, China’s second largest trade partner, would not decrease by a large margin as most of Chinese exports to it were low- and middle-end.’

China’s GDP in 2007 reached RMB24.66 trillion, an increase of 65.5% over 2002 and average annual increase of 10.6%. However, the consumer price index (CPI) in 2007 rose 4.8% year-on-year, the highest since 1997 and well above the 3% target, mainly due to rises in food and housing costs.

In January this year, monthly CPI rose 7.1%, the highest monthly surge in the past 11 years. Most of this was due to rises in the cost of food, especially pork.

In general, the impact from U.S. subprime crisis on global economy is not clear. And there is no consensus on how international oil price and price hikes would impact on inflation.

Indeed, Premier Wen Jiabao’s report showed strong concern on the issue of prices, and came up with nine measures, short- and long-time, to increase effective supply and curb unreasonable demand.

These measures include expanding production, especially the production of the basic necessities of life such as grain, vegetable oil and meat as well as other commodities in short supply, speeding up improvement of the reserve system, promptly improving and implementing measures to aid the low-income sector of the population and to make sure that the prices of the means of production, particularly agricultural supplies, do not rise rapidly.
Source: China View