Doing Business in China

chinese economy 2010 growth forecast at 8 percent."In 2010, the external environment will remain rather grim but it will not deteriorate further," said Zhang Liqun, an economist at the Chinese State Council's Development Research Centre, which yesterday predicted growth of 9.5 per cent for this year. The think tank's 2010 forecast is well above Beijing's stated target of 8 per cent, which it sees as vital for job creation and ensuring social stability.

The Asian Development Bank has put its 2010 economic growth forecast at 8.9 per cent, while the International Monetary Fund predicts 9 per cent.

Whatever the eventual figure, the worst is seemingly over for the Chinese economy, which several analysts have forecast will eventually surpass that of the US as the world's biggest. Goldman Sachs, for example, reckons China's GDP will surpass that of the US by 2027. Despite the improving outlook for 2010, Chinese authorities are also aware of the threat of inflation. In his address, Premier Wen warned that officials needed to be watchful for a better than expected recovery leading to a hike in prices, especially in the real-estate sector: some Chinese cities saw residential property prices rise by about a third last year, and real-estate investment in China accelerated in November, up 17.8 per cent for the first 11 months of 2009 compared with the same period in 2008. "Parts of the economy are not balanced, not co-ordinated, and not sustainable," Mr Wen said, adding that "it would be better if lending by Chinese banks was not on such a large scale".

chinese economy 2010 growth forecast at 8 percent.Manufacturing will continue to be China's breadwinner. The sector recovered well in the last few months of last year, with rises in new orders and output driving the purchasing managers' index to a 20-month high of 56.6 in December, from 55.2 in the previous month.

That will cheer companies supplying the Chinese economy. Both BHP Billiton and Rio Tinto, the London-listed mining giants, have said recently that it is too early to predict real Chinese demand for raw materials. Meanwhile, Rio still has concerns over the incarceration of 4 of its employees who were arrested last summer on charges of bribery and "illegally obtaining commercial secrets". Rio has moved most of its China-based staff to Singapore.