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Agency: Economic growth to top 9% in 2010

(Xinhua)
Updated: 2009-11-18 23:05

BEIJING: China's economy is expected to grow by 9 percent next year on robust property and automobile sectors, chairman of CCXI, a China-based credit rating agency said Tuesday.

Mao Zhenhua, the chairman, also forecast the country's GDP growth this year would expand by as much as 8.8 percent. He added China's economic growth for the next ten years would slightly fall from the peak in 2010 to around 7 percent around 2020, still a relatively fast pace compared to other countries.

But he cautioned the heavy reliance on exports and investment as major drivers to the Chinese economy has not changed currently, and that the structure for economic growth has not been optimized.

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Mao made the remarks while addressing a conference that also shared outlooks for China's property market, and its automobile industry for the next year.

"China's property market is to remain steady in the next 6 or 12 months due to strong underlying housing demand in the country," said Kaven Tsang, assistant vice president of Moody's Investors Service Hong Kong Limited.

He attributed strong housing demand to rapid economic growth, expanding urbanization and rising living standards in the country.

Reduced inventory after strong sales over the past few quarters and improved liquidity of developers are also preventing a substantial decline in the property sector, he said.

According to the National Bureau of Statistics (NBS), housing sales in China reached 2.75 trillion yuan (403 billion US dollars) in value for the first three quarters this year, a year-on-year increase of 73 percent.

Amid weak exports, the Chinese government will also continue to promote domestic consumption and see fixed-asset investment increase, with the property sector remaining "central" to the Chinese economy, said Tsang.

NBS figures show investment in the real estate sector in China posted a 28.4 percent growth in October this year.

The CCXI also forecast China would continue to see robust growth in auto sales in 2010, driven by the steady development of national economy, rise in individual income and stronger demand from China's central and west regions.

Chang Haizhong, senior CCXI analyst, said "cars have great market potential in the central and west regions which will become a new growth point for auto industry."

For example, sales of heavy trucks are expected to grow considerably next year, boosted by the government's massive fixed-asset investment, fast development of logistics and expansion of expressway network.

"Bus and sightseeing coach sales will also rise next year, as the government is determined to step up development of public transit systems, and people show more willingness to travel," Chang said.

He also said auto joint ventures in the country would try to seek a bigger share of middle and low-end market while keeping the dominant position in high-end market next year, posing a threat to domestic self-owned automakers.

Chevrolet, an arm of Shanghai GM, introduced SAIL, a new car model last week. Sales of the new model, priced less than 60,000 yuan, would start in January next year.

In the first ten months this year, auto sales in China broke the 10 million mark to 10.89 million units, up 36.23 percent from a year ago, surpassing the United States as the world's largest auto market.