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WB: China's GDP to grow 9.5% in 2006
2006-05-23 00:00


China's sizzling economy will grow 9.5 percent this year, the World Bank said in a forecast released Wednesday, up from its earlier figure of 9.2 percent.

That would be slightly lower than the 9.9 percent that China's economy expanded last year.

Workers perch on a steel structure at the construction site for a giant roof in Xiangfan, central China's Hubei province April 24, 2006. The World Bank revised China's forecast GDP growth for 2006 up to 9.5 percent. [Reuters]

The revision, contained in a quarterly report on China's growth and government policies, was the second time the World Bank has raised its forecast. It matched a 9.5 percent forecast issued earlier by the Asian Development Bank.

The government's official growth target is 8 percent. The economy expanded by 10.2 percent in the first three months of this year, compared with the same period of 2005.

Beijing is trying to discourage what it says is excessive investment in factories, luxury apartments and other unneeded assets, which it says could lead to financial problems.

But the government is eager to continue strong growth in order to reduce poverty, especially in rural China.

In February, the World Bank raised its growth forecast of 8.7 percent for China after the government revised economic data for previous years based on a nationwide survey.
The World Bank also said it expects Beijing to let its currency, the yuan, rise in value faster in order to curb excess liquidity in financial markets. It said that might also help China to reduce its politically volatile current account surplus.
The United States and other trading partners are pressing Beijing to ease exchange-rate controls on the yuan and let it rise in value.

They contend the exchange rate is up to 40 percent too low and gives Chinese exporters an unfair price advantage, hurting foreign competitors and fueling a huge trade surplus.

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