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Economists call for action to avoid slowdown
(AFP)
Updated: 2005-08-29 07:04
SHANGHAI- While China has spent two years battling to rein in its runaway
economy, senior economists and government advisers now warn the economic
powerhouse needs fiscal spending if it is avoid a looming slowdown, AFP
reported.
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constuction worker walks high on top of scaffolding at a construction site
in Beijing, 17 August 2005. [AFP] | Despite
impressive headline numbers, there are big underlying problems which need to be
confronted, they say.
They echo calls to relax China's fiscal stance, dust off the policies of
former premier Zhu Rongji and start issuing a greater number of treasury bonds
to finance public works, helping to mitigate what they say is a dangerously
slowing economy.
Cooling import growth, worryingly low inflation and shrinking industrial
profits all suggest the expansion which began in earnest three years ago is
under threat said He Fan, a researcher with the Chinese Academy of Social
Sciences (CASS) and adviser to the government on economic matters.
"If there was only one of these three signals, we should hesitate to say the
economy is slowing down but all three are happening together so we are quite
confident in saying that there is a danger of a slowdown," He said.
Yet first half gross domestic product data and July indicators clearly
underlined there was little real statistical evidence of a slowdown. The debate
about economic stimulus, it seems, remains just that.
The headline numbers continue to shine and the government has revealed little
about future policy direction, preferring to stick to its mantra of pursuing "a
prudent fiscal and monetary policy".
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