Beijing, Oct 17 (ANI): Government researchers in China feel that the country's Gross Domestic Product (GDP) will grow about nine percent next year, but the economy will be confronted by rising labor costs, liquidity problems and difficulty in sustaining rapid growth in the long run.
"China's exports and investments would be much better in 2011 than this year, but the growth rate of consumption would pull back slightly from this year's boom, making 9 percent growth 'very likely'," The Xinhua quoted Liu Shijin, Deputy Director of the Development Research Center of the State Council, or China' Cabinet, as saying.Speaking at the OTO Fortune Forum held by the Bank of Communications on Saturday, Liu predicted an annual 10-percent GDP growth due to the economic slowdown in China during the second half of the year.
Liu in his research said China still faces three major challenges in the long term to keep its economy on track for sustained growth.
"The first challenge comes from the rapid rise of labor costs in the country," said Liu, warning: "The competitiveness of Chinese companies will be threatened by rising labor costs unless they find a new source of growth, such as innovation."
"The second challenge is from liquidity as China's currency, the renminbi, and other non-U.S. dollar currencies are under forced appreciation pressure following the Federal Reserve's considering a new round of quantitative easing of the monetary policy," he added.
Liu further said the third foremost challenge that concerns China is whether the country can sustain its quick economic expansion in the future. (ANI)