China's economy to grow 9.6 pct this year: think tank

By Kim Young-gyo
HONG KONG, April 21 (Yonhap) -- The Chinese economy will continue to expand at a brisk pace this year as the government is working to maintain steady growth, a state-run think tank said Thursday.
The country's gross domestic product is expected to grow about 9.6 percent this year, down 0.7 percentage point from last year as economic fundamentals are unlikely to change significantly, the Chinese Academy of Social Sciences said in a report.
In 2010, China's economy expanded 10.3 percent, up from 9.2 percent the previous year, despite the country's monetary tightening to tame inflationary pressure. China's economy continued to maintain strong momentum in the first quarter of this year, growing 9.7 percent.
The Chinese Academy, however, warned that the country's commodity prices have continued to rise since May last year, mainly driven by excessive liquidity, fast economic growth and a feeble agricultural foundation.
It said the rising costs of salaries, energy, raw materials and land as well as an international commodity price surge were the major factors that pushed the consumer price index (CPI) upward.
Stressing that cooling down inflation is the top priority for policymakers, the academy estimated that it is possible for China to rein in the CPI growth to within 4 percent, as long as China maintains an economic growth rate of between 8 to 10 percent.
China's consumer prices rose 5.4 percent in March from a year earlier, up from a 4.9 percent gain in February. The figure was the sharpest gain in 32 months.
Chinese Premier Wen Jiabao said last month that China will target an 8 percent lower economic growth rate and contain the CPI to about 4 percent this year.
The People's Bank of China raised the deposit reserve requirement ratio for its major banks for the fourth time this year Sunday. Earlier this month, the central bank raised the benchmark interest rate for the second time this year.
ygkim@yna.co.kr