China remains optimistic about maintaining double-digit growth

Beijing () China's economy will grow 10.1 per cent in 2008 and 9.5 per cent in 2009 despite the crisis engulfing global markets, the government's top think-tank said in a report released on Friday.

The forecasts by the Chinese Academy of Social Sciences (CASS) are more optimistic than those of the IMF, which said this week it expects 9.7 per cent growth in Chinese gross domestic product this year and 9.3 per cent in 2009.

"The financial crisis and the world economic slowdown will have an impact on us, but they won't change the fundamentals of the Chinese economy," Chen Jiagui, vice-head of CASS, told a conference.

China's GDP expanded 10.1 per cent in the second quarter from a year earlier, down from 11.9 per cent in all of 2007. "The slowdown in 2008 and 2009 should be read as a normal fluctuation in growth. There is not enough evidence to say that an economic downturn is taking place," the think-tank said in the report.

Domestic investment and consumption would keep the world's fourth-largest economy on track, the report said.

Sectors

Retail sales will grow 19.6 per cent in 2008 and 17.0 per cent in 2009, while fixed-asset investment will increase 26.6 per cent this year and 21.3 per cent next year, CASS forecast.

Both indicators are expressed in nominal terms, and the think-tank expects consumer inflation to drop to 4.5 per cent in 2009 from 6.5 per cent on average this year.

China's exports will grow 22.6 per cent this year and 21.1 per cent in 2009, with imports rising 30.0 per cent and 26.0 per cent respectively, CASS said.

According to the report, China is expected to report a $251 billion trade surplus in 2008, falling to $243 billion in 2009.

Beijing (Reuters) China's passenger car sales shrank for a second month in a row in Sep-tember, official data showed yesterday, as a slowing economy slammed the brakes on fast-growing demand in the world's second-largest vehicle market.

Car sales fell 1.44 per cent in September from a year earlier to 552,800 units, according to the China Association of Automobile Manufacturers, the country's official industry association.

The data followed nine-month figures from two major automakers showing a marked slowdown in growth from last year.

Ford Motor's vehicle sales in China climbed 7.13 per cent in the first three quarters of the year from the same period a year earlier, compared with 30 per cent growth during that period last year.

Top European car maker Volkswagen AG posted 13.1 per cent sales growth in mainland China, Hong Kong and Macau during the first nine months of the year, compared with 30 per cent growth during the same period a year ago.

Industry researcher JD Power and Associates, in a report on Thursday warning of a collapse in the global auto market next year under the weight of the credit crisis and economic stress, forecast China auto sales growth this year at 9.7 per cent, down sharply from last year's 24.1 per cent.

September's China sales drop followed a 6.24 per cent decline in August.