By Hao Zhou (chinadaily.com.cn)
Updated: 2007-10-23 16:21

Wang Xiaoguang, an economic expert from the National Development Reform Commission (NDRC), forecast China's consumer price index (CPI) to climb 4.3 percent this year. In a discussion about the future of the economy, he noted the index exceeded original targets but is still controllable, according to the China Securities News.

Wang is director of the research office of economic operation and development under NDRC's Institute of Economics. He also predicted that the CPI rise next year is unlikely to retain this year's momentum and that price control efforts will likely turn to focus on the realty market from consumer goods.

With regard to this year's macro economic figures, he estimated gross domestic product (GDP) will amount to 24.34 trillion yuan (US$3.24 trillion), up 11.5 percent year-on-year, 0.4 percentage points higher than last year’s growth rate.

In the same period, over 12 million laborers will be newly employed in cities and towns. Industrial added-value will increase 18 percent year-on-year amongst State-owned enterprises and among those non-State-owned enterprises whose yearly core business sales surpass five million yuan. Fixed asset investment in cities and towns will reach more than 12 trillion yuan, up 29 percent. Trade surplus will account for at least US$257 billion, according to Wang's prediction.

Forecasting next year's economic trend, Wang sees a growth rate of over 11 percent and a GDP of over 28 trillion yuan. However, the economy has reached a peak and will probably go through a mild adjustment in the latter half of next year or the following.

Wang also predicts CPI to grow 3.5 percent in 2008; fixed asset investment to surge 25 percent to more than 15 trillion yuan; overall retail amount of social consumer goods initially to go over 10 trillion yuan, up 16.5 percent year-on-year; unemployment rate to be under 4.5 percent; and trade surplus to reach 20 percent growth, with US$308.4 billion for next year.

In respect to macro economic policy, the concentration will turn to controlling the sizzling real estate market, according to Wang. He interpreted the price hike since the second quarter this year as a structural economic upgrade, and not a signal for comprehensive inflation.

One factor effecting economic stability and financial safety is the roaring house prices. Wang suggested price management should keep an eye on housing prices by controlling speculation, introducing tax measures to the real estate market, and raising the down-payment ratio on second house purchases or above.