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China's economy grew 7.3% in 2001

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China's huge domestic economy helped shield it from the downturn seen elsewhere in Asia this year  


By staff and wire reports

BEIJING, China -- China's economy grew 7.3 percent in 2001, according to a preliminary estimate by the State Statistical Bureau.

Gross domestic product this year was more than 9.58 trillion yuan ($1.16 trillion), the bureau said Sunday, according to the official Xinhua news agency.

The growth rate of 7.3 percent was roughly in line with expectations. Although it was slightly lower than the 7.4 percent forecast by many officials, it exceeded a state-set target of seven percent.

China's performance is in sharp contrast to Asia's biggest economy, Japan, which entered its fourth recession this year.

Many other Asian economies -- notably Singapore, Taiwan, Hong Kong and Malaysia -- have also done badly in 2001.

They have been hit by the global downturn in the information technology sector and the sharp slowdown in the U.S. economy, which is a major destination for Asian IT exports.

IMF tips 6.8% in 2002

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In its world economic outlook released on December 18, the International Monetary Fund said it expected China's economy would grow 6.8 percent in 2002. It expects Japan's economy to shrink by 1 percent.

The other big developing economy in Asia is India, which the IMF says grew 4.4 percent this year and will likely grow 5.2 percent in 2002. As with China, its domestic economy is so large that it is the dominant influence on GDP growth.

Although many analysts question the accuracy of Chinese figures, it is clear the economy is continuing to power ahead.

"Compared to the rest of Asia, it's definitely one of the highest economic growth rates. Most of the Asian economies are doing much worse than China," Liao Qun, senior economist for Standard Chartered Bank in Hong Kong, told Reuters news agency.

However, with the U.S., Europe and Japan all looking at difficult times in 2002, China's export sector will take a hit.

Joined WTO this month

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Beijing's expansionary fiscal policy underpinned the 7.3% growth rate  

China joined the World Trade Organization this month -- a move that will open up its domestic sector to potential challenges from overseas companies.

China's trade volume was still forecast to hit a record high of more than $500 billion in 2001, up 7 percent year on year, Foreign Trade Minister Shi Guangsheng said last week.

But export growth would slow to around 5 percent this year, Shi said, down from a 27.8 percent surge in 2000. Imports were forecast to rise around 8 percent.

State Statistical Bureau director Zhu Zhixin, quoted by Xinhua, said an expansionary fiscal policy helped China achieve growth higher than the 7 percent target set by the government in March.

"This year the general quality and results of China's economic operations continuously improved," Zhu said.

China has already set a target of 7 percent GDP growth again for 2002, but achieving that goal would depend on when the world and U.S. economies start to recover, analysts said.

Development strategy at 'critical juncture'

"I'm expecting a moderate slowdown next year. I believe 7 percent is achievable but it depends on how the global economy will behave and when it will begin to recover," Liao said.

The World Bank earlier this month said China was at a "critical juncture" in its development strategy.

In a special report on China and the knowledge economy, it said China needed to overcome a number of serious challenges in the decade ahead.

It said these included creating between 100 million and 200 million new jobs for people moving out of agriculture and state-owned enterprises, and absorbing 80 million new entrants to the labor force.



 
 
 
 


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