China’s economy is highly likely to slow next year and efforts to spur growth will be constrained by inflation and government debt burdens, said Wu Xiaoling, a former deputy central bank governor.
The government shouldn’t expand monetary or fiscal stimulus because of price pressures and central and local-government debt, Wu said in comments published today by the Financial News, the central bank’s newspaper. Wu is vice director of the finance and economy committee of the National People’s Congress.
The world’s biggest exporting nation faces weakening global demand because of the European debt crisis and U.S. unemployment. China’s officials are still grappling with the side-effects of 2008 and 2009 stimulus measures, including elevated inflation and the risk of bad loans for banks.
Gross domestic product expanded 9.5 percent in the second quarter of this year.
Next year’s slowdown will be caused by factors including reduced overseas demand, measures to alter the structure of the economy and to cool the property market, and adjustments to infrastructure investment, the article quoted Wu as saying.