Blue Paper on Chinese Economy in 2009 Published

The Chinese Academy of Social Sciences published its blue paper on China's economy of 2009 Tuesday afternoon, with a heavy emphasis on the country's GDP growth, employment, and stock and housing markets.

The blue paper points out that China's GDP growth is expected to slow down to 9.8 percent for 2008, and further decline to 9.3 percent in 2009.

China has suffered three slow growth periods over the past 20 years. Early in 1990, the Chinese economy endured a hard landing due to the central government's tough macro controls that targetted overheating economic sectors.

Then in 1998, the Chinese economy was hit by the Asian financial crisis that began in 1997. And now, the Chinese economic downturn is mostly attributed to the global financial crisis, as well as some government macro control policies.

The blue paper also notes that housing prices will fall dramatically in a short period of time, and subsequently enter an adjustment period in 2009.

Experts believe the real estate industry will be bogged down throughout 2009 as demand weakens under high prices and the global financial crisis. Homebuyers and investors will be more prudent in their activities. Suppliers will also experience a chilly season next year as some small and medium-sized enterprises with limited capital are forced to leave the market.

Risks will increase as some homebuyers become unable to pay their mortgages and some builders will not be able to pay workers to complete projects.

The paper adds that one million college graduates will be unable to find jobs by the end of 2008, a problem that will be exacerbated when more people may lose their jobs in 2009 and more than five million new graduates begin seeking employment the same year. The paper advises students to either create start-ups or find other ways to employ themselves.

The disposable incomes of urban and rural residents will still increase in 2008 and 2009, but at slower rates.

Source: CRIEnglish