China’s gross domestic product (GDP) is likely to grow 8.5 percent compared with this year’s estimate of 10 percent, said an Economic Times report quoting Hang Seng bank.
Looking into 2011, mainland China's economy is expected to grow more moderately than in 2010, Bill Leung, senior economist at Hang Seng Bank.
The recent accelerate pace of monetary tightening on the mainland, the lingering of the sovereign debt problem in Europe and the fragility of the US economic recovery are the forces that will slow the mainland's economic growth in 2011, he said.
The Bank expects tightening measure to continue in the coming months as inflation rate zooms up.
China is stepping up its efforts to contain inflation, even as the latest economic report indicates that inflation hovers around a 28-year high of 5.1 percent.
Chinese central bank raised interest rates last week for the second time in two months, in yet another attempt to control money supply and contain inflation, which has become a serious concern for China's economic growth.
Overseas demand mainly in the advanced economies will continue to be weak, as the US unemployment rate stands high at around 10 percent and the prospect of any significant improvement in the nation’s labor market conditions in the near-term is bleak, the bank said.
Besides, fiscal tightening measures and tax hikes in many nations in the Europe will negatively impact the economic growth in China, the bank added.
In the January-November period, foreign trade of China increased 36.3 percent to $2.68 trillion year-on-year.
With the US and Europe being the biggest trading partners, China’s trade surplus with the countries in November stood at $16.8 billion and $13.6 billion respectively.
A recent report from Asian Development Bank showed China’s economy is estimated to grow at 9.1 percent in 2011.