Chinese participants at the Asia- Pacific Economic Cooperation forum in Honolulu expressed confidence in their nation’s economic prospects, with President Hu Jintao pushing for increased imports as a means to balance the economy and foster global growth.
After Hu spoke yesterday, two of China’s best-known economists, International Monetary Fund Deputy Managing Director Zhu Min and National Economic Research Institute Director Fan Gang, said the country’s economy was heading for a “soft landing” as growth slows. They cited lower inflation and bad debts at banks, and what Fan said were timely measures to avoid a bubble in the property market.
“It has become ever clearer that the Chinese economy is moving to a soft landing,” Zhu said. “The Chinese economy today is really moving to an inflection point, moving to more services and capital-intensive economy.”
Zhu and Fan, speaking on the same APEC panel, said economic expansion would slow from the 9.1 percent growth in the third quarter of this year, with Fan saying sustainable growth in gross domestic product was about 8 percent. Their forecast for a soft landing is in contrast with some observers including hedge fund manager Jim Chanos, who has forecast since at least February 2010 that the property market will slump, saying that China is on a “treadmill to hell” because of its reliance on real estate for growth.
Hu told business executives that China will seek to boost imports in part to help stimulate economies around the world.
Trade Surplus Critics
“We must be firmly committed to maintaining growth and promoting stability, with a special emphasis on ensuring strong growth in order to add momentum to the economic development in the Asia Pacific and beyond,” Hu said. China will “focus more on increasing imports while maintaining a stable level of exports.”
China, the world’s biggest exporter, has been the target of critics for its large trade surplus with the U.S., the world’s biggest importer. China’s overall trade surplus has been declining as imports, including Porsche Automobil Holding SE (PAH3)’s Cayenne sport-utility vehicles and iron ore from Rio Tinto Plc (RIO), have increased along with rising incomes and a nationwide surge in construction spending.
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