Shanghai Daily | 上海日报 -- English Window to China News

THE Chinese economy might already have begun its cyclical adjustment and its growth is set to slow in the next few years, a Beijing-based weekly reported yesterday, quoting Xu Xianchun, deputy director of the National Bureau of Statistics.

"According to our initial judgement, 2007 was probably the peak point of the current Chinese economic growth curve. The growth rate from this year on will slow gradually," Xu told China Economic Weekly, a magazine run by the People's Daily.

According to Xu, the Chinese economy had grown by double digits in the past five consecutive years since 2003 or on average 12.8 percent annually.

It was the second time since 1990 that the world's fourth-largest economy had expanded so robustly. Between 1992 and 1996, the Chinese economy soared annually by 12.4 percent on average.

Such growth, however, would not last given the law of economic cycles, Xu said, adding a slowdown was certain to take place after a reaching a peak point on the growth curve.

"Globally, it is rare for economies to sustain a double-digit growth rate for five years in a row. So far, only Japan, Singapore and Hong Kong have done so," Xu pointed out.

Lower forecast

He added another sign of a slowdown in the economy was that international financial institutions had forecast a lower growth rate of 11.9 percent for China in 2008. The country's economy grew 11.9 percent in 2007.

Xu said the cyclical fluctuation this time was expected to be much milder than that in the 1990-1999 cycle and the Chinese economy looked to make a successful soft-landing in coming years.

According to Xu, in 1999 China reported an annual growth rate of 7.9 percent, which he said was the trough of the 1990-1999 cycle.

"The current cycle has not ended yet. We are forecasting a new trough, which we think won't be too low," Xu said.