Report Indicates Slowing of China's Economy

A report in a state-run Chinese newspaper today said that China's economy is slowing compared to growth reported last year.

According to a China Central Bank report released today, China's economy is expected to grow 8.9 percent in 2006, slowing from 9.9 percent last year.

The report, run in China Securities Journal, a state-run newspaper, annual growth in China's gross domestic product will gradually slow from 9.2 percent in the first quarter of this year to 9 percent in the second quarter, 8.9 percent in the third and 8.7 percent in the fourth quarter.

The consumer price index, China's main gauge of inflation, is expected to be at about 2 percent this year, the report said. The index climbed 1.8 percent in 2005.

Also, China's government reported Monday that the country's industrial output rose 20.1 percent in February from the same month a year earlier to 547.3 billion yuan ($68.2 billion).

China's economy expanded by 10.1 percent in 2004 but growth has been gradually slowing as the government attempts to rein in excess investment in real estate projects and some industries, such as steel and cement.

The government's five-year-plan, setting policy through 2010, calls for bringing economic growth down to 7.5 percent a year, with 2006 growth at 8 percent.

The Central Bank's forecasts were based on the assumption of 4.3 percent world economic growth in 2006.

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