China economy may grow 8.2 pct in 2013

PHOTO: China economy may grow 8.2 pct in 2013

BEIJING - China's economic growth may quicken to 8.2 per cent in 2013 from an expected 7.7 per cent this year in response to official growth-promoting polices, but downside risk remains from global uncertainties, the Chinese Academy of Social Sciences (CASS) said on Wednesday.

The country's top think tank said in its "blue book" report on China's economy that Beijing should boost budgetary help to the economy by borrowing and spending more, and cutting taxes that hinder economic efficiency.

China has not yet issued an official GDP forecast for 2013, but CASS's status as the premier state-backed centre for academic and policy research means its outlook to a certain extent reflects central government thinking.

"We are cautiously optimistic on the outlook for 2013. We should be alert to possible downside risk and be prepared with enough policies," said the think-tank.

The CASS recommendations are in line with the central leadership's plans to make its macro-economic policies more targetted next year, including allowing more market-determined pricing of resource products and expanding value-added tax reforms.

Authorities plan to maintain controls over the important real estate sector while allowing reform of state firms, the head of the ruling Communist Party Xi Jinping said on Tuesday.

His remarks came ahead of the Central Work Committee meeting on economic policy, which is expected to convene early this month.

There are already signs of economic revival in the world's second largest economy, with two purchasing managers' index (PMI) surveys earlier this week showing the pace of growth in the manufacturing sector has quickened.

"China could unveil further policies to stabilise economic growth when necessary as the government still has a relatively large room for manoeuvre in fiscal and monetary policy," CASS said.

Specifically, it recommended extending value-added tax reforms to more regions and sectors.

Still, the GDP forecast is contingent on the premise that European debt crisis does not worsen and the US avoids a"fiscal cliff", CASS added.

China's annual economic growth dipped to 7.4 per cent in the third quarter, slowing for seven quarters in a row and leaving the economy on course for its weakest showing since 1999.

The Chinese economy is expected to gather momentum in the fourth quarter after an uptick in key economic activity indicators in October, following encouraging signs in September, thanks to new pro-growth policies rolled out by the government over recent months.

The think-tank forecast China's inflation would rise to 3.0 per cent next year, with export growth at 10 per cent and imports up 13.7 per cent during the coming year.

China's annual consumer inflation eased to 1.7 per cent in October from a year earlier, giving policymakers scope to further loosen monetary policy if needed to support growth.

Meanwhile, China's exports climbed by 11.6 per cent in October, the fastest pace since May, with imports growing 2.4 per cent.