China’s gross domestic product will grow 10 percent next year and inflation will average 3.3 percent, the Chinese Academy of Social Sciences said in its so-called Blue Book on the economy.
China will maintain relatively rapid growth provided macro- economic controls are stable, according to the report, released at a briefing in Beijing today.
The government is winding back the stimulus policies that drove the nation’s rebound from the global financial crisis, raising interest rates in October for the first time since 2007. Premier Wen Jiabao is seeking to counter inflation at a two-year high and the risk of property-price bubbles in some cities.
The government should neither “tighten too excessively” nor “blindly roll out a ‘second stimulus’ policy,” said Chen Jiagui, editor-in-chief of the study.
China will shift to a “prudent” monetary policy next year, the ruling Communist Party’s Politburo said Dec. 3. The government had described the stance as “moderately loose” since late 2008.
Rising global commodity prices, labor costs and the amount of money in the financial system will contribute to inflation pressures next year, Wang Tongsan, one of the authors, said.
CASS is a government-backed research organization.
China’s economy expanded 10.6 percent in the first three quarters of this year and inflation quickened to 4.4 percent in October.