|
China's economy is strong
|
 |
December 12, 1996: 7:02 p.m. ET
Vying for entry into the WTO, China is earning high marks for its economy
From Correspondent Sissel McCarthy
|
LONDON (CNNfn) -- China's entry into the World Trade Organization is proving to be a hot topic at this week's conference in Singapore.
The U.S. maintains that Beijing must try harder if it wants to join.
But Asia's calm, collected giant is earning high marks for its economy. China's biggest concern, inflation, is expected to fall from 17 percent to 10 percent by the end of the year.
Its economic growth has surpassed that of all its neighbors. In fact, China's growth has been so strong that the government has even had to restrain it.
"They want to keep growth rates down to about 10 percent a year. They don't want to go back to the growth rates of between 17 and 20 percent because that's where the inflationary pressure kicks in," said Richard Grant, head of Asia Programs for the Royal Institute of International Affairs. (171K WAV) or (171K AIFF)
But even giants have weaknesses. China's inefficient state-owned industries have hurt industrial output, and Beijing had to help them out of a credit squeeze earlier this year by cutting interest rates.
Emerging private sector industries -- especially joint ventures with overseas companies -- have really fired up the economy.
"There is every expectation that foreign direct investment in China will continue to be very high for at least the next couple of years," said Georgina Wilde of the Economist Intelligence Unit. (399K WAV) (399K AIF)
"It is hard to forsee that it can go on topping $30 billion. There is competition from other countries; China is becoming less competitive in terms of cost," she said.
China's main stock markets are still considered too risky for many overseas investors because of their volatility and loose regulation.
In addition, the hand over of Hong Kong and a big meeting of the Chinese Communist party -- which could change government policies towards free market economics -- will keep international investors wary over the coming year.
Still, domestic investors seem confident. They have driven the Shanghai and Shenzhen markets to year-highs this month.
|
|
|
|
|
 |
|
