Weak exports may pull down China growth: WB
China's economic growth will slow to an estimated 9.4 percent in 2008 from 11.4 percent last year, ending five straight years of double-digit expansion, the World Bank said Tuesday.
Growth next year is projected to ease still further, to 9.2 percent, with the slack partially offset by robust domestic demand, the Washington-based institution said in a half-yearly report on the East Asia region.
The slower growth, a result of weaker exports, will likely be welcomed by Beijing policymakers who have struggled to cool the economy despite a raft of measures aimed at averting overheating, the bank said.
"While the uncertain global outlook may slow China's exports, the country's growth is expected to remain robust, and the authorities are well positioned to stimulate demand if needed," it said.
"This growth rate reflects not only the ability of Chinese exporters to seek alternative export markets but also the growing role of domestic demand."
The Chinese economy held up in 2007, posting its fifth straight year of double-digit expansion despite slowing exports, especially to the United States, the report said.
However, inflation rose last year and showed no signs of easing this year because of higher food prices, which were made more pronounced due to tight pork supplies, it said.
"With households spending on average more than one-third of their incomes on food, the food price hikes have affected purchasing power, particularly of the urban poor and some rural groups, although higher food prices benefit net food producers in rural areas," it said.
"In addition, international prices of energy, industrial materials and agricultural products continue to rise and will gradually exert their influence on domestic prices."
Premier Wen Jiabao and other officials have repeatedly called for the stabilisation of food prices, voicing worries that rising costs of food could lead to social unrest.
The Chinese government has targeted eight percent economic growth for this year while aiming to maintain inflation at 4.8 percent.
Another report from Phnom Penh adds: Cambodia's economic growth is expected to slow by more than two percentage points this year to 7.5 percent due to high inflation and a downturn in garment exports, the World Bank said Tuesday.
The economy grew by 9.6 percent in 2007, but growth this year will be held back by weakness in the garment sector, Cambodia's largest source of foreign exchange, the bank said.
The garment industry grew only 8.0 percent last year after suffering a dismal fourth quarter that saw orders plummet by nearly half, it said.
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