By IANS,
Singapore : The World Bank Tuesday projected a growth of 9.1 percent for China in 2011, followed by a slower growth of 8.4 percent in 2012.
The developing East Asia as a whole is expected to grow by 7.8 percent in 2012, down from 8.2 percent this year as the growth continues to moderate on weakening external demand, the bank said in its latest East Asia and Pacific Economic Update, reported Xinhua.
Bert Hofman, the bank’s chief economist for East Asia and Pacific, said the leading indicators projected further softening for China in the coming six to 12 months but “do not signal an immediate hard landing”.
Nevertheless, the growth is expected to slow as external demand weakens and China pushes forward its own structural adjustment towards economic growth driven more by domestic demand.
“While the central projection is for a gradual deceleration of growth, the risks are tilted to the downside. The global outlook has become increasingly precarious as advanced economies growth turned more sluggish than previously anticipated and uncertainties continued to loom over the euro area sovereign debt,” the report said.
The bank’s forecast of 9.1 percent was higher than its previous forecast of 9 percent for this year.
Hofman said he saw the risks in China in the banking system and the property market, but nevertheless the Chinese authorities were aware of the risks and that they were under control.
The process of structural adjustment is likely to reduce headline growth over the medium term, but will place the country’s longer-term prospects on a more solid footing, he said, adding that experiences of other countries show it is still possible for China to achieve multiple years of high growth going ahead at the current stage.
China’s demand for imported consumer goods has been increasing, presenting “an opportunity for the region’s exporters”, the bank said.
“As its trade surplus declined, China’s imports for domestic needs grew faster than imports for processing and re-export. Its exports of consumer goods have also been growing rapidly,” the report said.
Hofman said he saw a shift in the demand pattern of China so that the country is increasingly important as a market for final consumer goods, thereby “presenting an opportunity for the region as well”.