Are you sure?

OECD predicts double-digit economic growth for China

The Chinese economy is expected to grow at rates above 10% over the next two years, the Organization for Economic Cooperation and Development (OECD) said Thursday.

In an annual global survey, the Paris-based group said China's GDP would increase by 10.4% in 2007 and 2008, with domestic demand set to keep expanding. The inflation rate will drop to 2.5%, down 0.3%age points from last year, the 30-nation group said in its Economic Outlook.

The OECD added that China's consumer price index (CPI) in 2007 and 2008 will stand at 1.8% and 1.5% respectively. The current account surplus, the broadest measure of trade, should rise to $314.6 billion this year and to $368 billion in 2008, 10.2% and 10.6% of China's GDP respectively, said the report. It added that the growth rate of China's exports may decrease due to slower world demand and the stronger Chinese currency, the RMB, over the next two years.

However, an increasing consumption capacity in China's rural areas and the revitalized real estate sector would rapidly expand the domestic demand, the report said. The Chinese economy surged 10.7% in 2006, the fourth consecutive year of double-digit growth. In March, Chinese Premier Wen Jiabao said in a government work report that China plans to gear down its economic hike to 8% this year. (