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    Official outlines challenges for the economy

    Updated: 2013-01-27 07:40
    By Zheng Yangpeng ( China Daily)

    A weak base for economic recovery, inflation and fluctuations in the world's economy are the major challenges for China's economy in the new year, according to Zhang Ping of the National Development and Reform Commission.

    The chief of the country's top economic planning authority made his remarks at a luncheon during the China Center for International Economic Exchanges' annual conference on Saturday.

    "The base for China's economic recovery needs to be further consolidated. China's agricultural production base is still vulnerable, while inflation should cause serious concern," he said.

    China's economy in the fourth quarter rose 7.9 percent compared to the same period a year ago, halting seven consecutive quarters of declining growth. The rise has eased fears that China is in the midst of a downward trend.

    Some economists, however, doubt whether this momentum can carry forward as no major stimulus package is expected to roll out this year, and the central bank is maintaining a steady monetary policy.

    Meanwhile, inflation has quietly risen and the consumer price index grew from November's 2 percent to December's 2.5 percent.

    A report by Chinese Academy of Social Sciences released on Saturday estimates the CPI will rise 3.5 percent, 0.9 percentage points higher than that of 2012.

    The quantitative easing policy adopted by the world's major economies has further intensified worry over inflation.

    Zhang also warned uncertainties in the international economy are another threat, citing last year's inaccurate forecast of foreign trade growth.

    "At the beginning of last year we made an inaccurate forecast. The turbulence in the world economy turned out to be much more severe than we had thought," he said.

    Falling demand in developed nations has dragged down China's export and import volume to 6.2 percent in 2012, well below the 10 percent government target. It is the only major economic growth indicator that missed the government's target, he added.

    "So this year we should pay special attention to our judgment of the external environment."

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