Beijing wants to reduce GDP growth to 8 pct, after 10.5 pct in 2006

13 December 2006

Beijing, China, 13 Dec – The Chinese government is making plans to contain the growth of its Gross Domestic Product (GDP) to 8 percent in 2007 after the Chinese economy growing an expected 10.5 percent this year, the Chinese official press said Tuesday.

Official financial newspaper, China Securities Journal cited Ma Kai, the Minister of the National Commission for Reform and Development, a government department responsible for economic planning, as saying that growth of the Chinese economy this year was due to increased investment in the country.

The investment in fixed urban assets rose 26.6 percent in the first 11 months of the year, as compared to the same period of 2005, Ma Kai said, adding that there was a serious risk of investment rising even further.

“Investment has to be curbed,” Ma Kai said, criticizing the banks and some local governments for feeding the expansion of investments in fixed assets, such as construction and real estate sales.

This week President Hu Jintao and Prime Minister Wen Jiabao pledged to double efforts to increase imports and foreign investment as well as maintain the level of exports.

In order to try to cool the economy down, the Chinese central bank has taken macroeconomic control measures, having raised interest rates twice this year, in an effort to reduce real estate growth and bank loans. (macauhub)