BEIJING: The best scenario for the Chinese economy in 2014 to achieve 7.8 percent GDP growth, a major think tank has said.
That could be obtained if the recently proposed reform initiatives were carried out and the global market shows a more robust recovery, said the National Academy of Economic Strategy under the Chinese Academy of Social Sciences.
But the central government must be watchful of a number of uncertainties, especially some problems on the domestic front, the academy said in a report published here in China Daily Tuesday.
If only the same strategies were pursued, there could be more complications to even sustain the 2013 growth rate.
The CASS economists warned that there would be even greater downward pressure on domestic growth in 2014, as new investment in public infrastructure is becoming less effective, overcapacity remains serious in a number of major industries.
The CASS report predicts 7.5 percent GDP growth and a 3.5 percent rise in the consumer price index in 2014. But the economists said they have concerns for the economy’s investment-dominated growth model, while a consumption-driven new model may still take some time to develop.
They aired their concerns ahead of the upcoming annual Central Economic Work Conference, which is to discuss development targets for next year and further clarify reform measures.
The CASS report said that the government’s efforts to stabilize economic growth are still focused on supporting fixed-asset investment, which was the key force driving the third quarter’s GDP growth rate up to 7.8 percent from 7.5 percent in the second.
“But the marginal effects of the policy are diminishing, and that will be the main factor hindering future development,” it said.
The report suggested a balance between controlling government-led investment and stabilizing growth in the near term, and continually implementing prudent monetary policy.