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Chinese export growth to slow to 15-20 pct -report

Written by: Staff
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BEIJING, Mar 3 (Reuters) Chinese export growth is likely to slow to 15 to 20 percent this year from 28.4 percent in 2005, a think-tank within the national economic planning agency said in a report published on Friday.

The same institute, the National Development and Reform Commission's Academy of Macroeconomic Research, forecast in mid-January that export growth in 2006 would slow to 15 percent.

The latest report, carried by the official China Securities Journal, said China's economy would remain reliant on exports this year because it would be difficult to stoke domestic demand in the short term.

This put the economy at the risk of a slowdown from last year's 9.9 percent rate of expansion, the think-tank said. It gave no specific growth forecast for 2006.

Overinvestment would remain a problem for the next one or two years despite government efforts to curb excessive building up of capacity, the think-tank said.

The report echoed a warning earlier in the week by the chief of the commission, Ma Kai, whose agency has singled out 11 industries in sectors such as steel, aluminium and autos where it believes overcapacity is having a serious impact on corporate profits.

Because of widespread oversupply, the agency said it expected inflationary pressures to remain muted in 2006 even if water and electricity prices go up.

REUTERS DH RAI0616

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