GDP growth for next year ‘to beat 2012’

GDP growth next year is likely to be higher than in 2012, according to a major economic report on Wednesday.

China is set to achieve 8.2 percent annual GDP growth in 2013, higher than the predicted 7.7 growth for 2012, the Chinese Academy of Social Sciences said in its “blue book” report.

Predicted GDP growth for 2012 will be the lowest since 2000 because of sluggish export demand and the subsequent slowdown in industrial production, the report said.

The report also suggested that a decade from now, GDP growth will remain robust and record average annual rates of between 7.5 and 8 percent.

GDP growth was 9.3 percent in 2011 and 10.4 percent in 2010, according to the National Bureau of Statistics.

The secondary sector, including production and construction, is expected to contribute 4.1 percentage points to GDP growth, falling from 5.2 percentage points in 2011. The service sector may drive growth by 3.3 percentage points, against 3.9 percentage points last year, the report said.

“Excess production capacity and retreating profits require further economic structural reform, and the priority for the government is to stabilize growth,” said Li Xuesong, deputy head of the academy’s Institute of Quantitative and Technical Economics.

Falling demand for exports, as well as the weak real estate market following curbs, dragged down third-quarter GDP growth to 7.4 percent, the seventh consecutive quarterly drop.

“To stabilize investment is the most direct and efficient

8.2 percent

Projected GDP growth for 2013 according to the Chinese Academy of Social Sciences

way to curb the slowdown risk and keep up growth in the short term,” said Li.

The academy predicted that total fixed-asset investment growth this year is likely to slow to 20.4 percent from 23.6 percent in 2011.

In the first three quarters this year, fixed-asset investment was up by 20.5 percent, 4.4 percentage points lower than that for the same period in 2011.

Zhang Hanya, chairman of the Investment Association of China and a researcher with the National Development and Reform Commission said fixed-asset investment may reach 24 percent in 2013, and this would contribute about 5 percentage points to GDP growth.

“The investment will focus on technically updating enterprises, livelihood development, infrastructure construction and ordinary commercial housing construction,” said Zhang.

The annual Central Economic Working Conference will take place in December, and the new leadership will set next year’s growth target.

There is plenty of room to adjust monetary and fiscal policies, and a further easing may be taken to stabilize growth if China suffers extreme downside risk next year, the report said.

“The government should remain alert to the potential risks from the gloomy global economic environment in 2013,” said Pei Changhong, head of the academy’s Institute of Finance and Trade Economics.