Related: China,India still highest-growth economies: UN report

China's economy grows 9.9 percent in 2005

    BEIJING, Jan. 26 -- The United Nations predicted yesterday that China's economic growth will slow this year but will still be at a robust rate of more than 8 per cent.

    The slowdown is mainly due to the implementation of measures to cool off investment in some sectors with excess capacity such as cement, steel and real estate, the United Nations said in its World Economic Situation and Prospects 2006 report.

    The UN forecast is less optimistic than two others. The Asian Development Bank has predicted about 9 per cent growth, and the Chinese Academy of Social Sciences has said 8.9 per cent.

    Zhu Baoliang, chief economist with the State Information Centre, said the United Nations may raise the economic growth prediction because the Chinese Government raised its estimate on gross domestic product (GDP) growth for this year to 10.1 per cent earlier this month, from 9.5 per cent previously.

    "The stable global economy expected this year will benefit China's foreign trade, a major propeller for the economy," Zhu said.

    The United Nations estimates the world economy will grow 3.3 per cent this year, the average for the past 10 years but higher than last year's 3.2 per cent.

    According to the UN report, China's imports of raw materials and manufactured components for domestic consumption are expected to decelerate, but imports of services will rise as the country seeks to improve that underdeveloped sector.

    Exports will continue to support growth in view of the competitive level in labour costs and the increasing labour productivity, the report said.

    "As in 2005, China is expected to drive economic growth in East Asia and the rest of the world," it said.

    East Asia's economic growth is estimated at 6.7 per cent last year, supported largely by China, whose economy grew 9.9 per cent year-on-year. Average regional growth is expected to grow 6.5 per cent this year.

    The report pointed out that China's economic restructuring is likely to intensify this year, thus making the entire economy more efficient.

    The country's banking sector has also improved, based on a fall in non-performing loans, which was largely due to write-offs and the recapitalization of banks, it said.

    (Source: China Daily)