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Growth of China'economy to slow down in 2006
(AP)
Updated: 2006-01-11 14:03

China's economy will slow to a still sizzling growth rate of 8.5 percent to 9 percent this year, the state planning agency said in a report published Wednesday.

Efforts to slow economic growth by curbing spending on large construction projects, among other measures, so far appear to have had limited impact, with growth last year estimated at 9.8 percent, according to the National Development and Reform Commission.

That forecast was 0.4 percent above previous estimates, due to a massive revision of economic data following a nationwide economic census that found larger than expected activity in the services sector.

The commission, in a report carried by the state-run China Securities Journal, said there would be a slight slowdown this year.

It said "2006 could be a year for macro control policies to continue to show effects."

China's consumer price index, its main measure for inflation, is expected to rise only 1 percent this year, and maybe yield to deflation later in the year, due to overproduction in many industries and soft domestic demand, the report said.

It predicted that China's exports would rise about 15 percent year-on-year and imports about 18 percent, moderating due to higher oil prices and simmering friction over China's burgeoning trade surpluses.

China has yet to issue full-year 2005 export and import data. In January-November last year, exports rose 29.7 percent on-year to $686.6 billion and imports increased 17.1 percent to $595.7 billion, according to Ministry of Commerce data.

The report also said China would not make significant revisions in the value of its currency, the yuan, although it would continue to liberalize foreign exchange policies.



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